First, there is an idea call trust, i.e., credit.
Second, the Fed can create credit out of thin air. Just call this Federal Reserve Note the Bernanke Vapor (or Bernanke Gas).
Third, the world is addicted to this Vapor and thinks it smells good. Wars have been fought over it; people work their asses off the obtain it; they even risk their lives for it. They trust the Vapor.
Now the debt with interest.
The total US sovereign and public debt is in the amount of X (that is all the debt to China, Japan, and all the medicare, social security debt now and in the future), and the total interest on X is Y. Now Bernanke goes to a Fed computer and types enough 0's following a 1 so that this number is >= (X + Y); he then wires this amount of Vapor to China, Japan, and medicare and social security. Debt and interest paid, and all Americans live happily ever after.
Here is the catch: China is worried about drug overdose on Vapor and the Vapor quality, and demanded higher interest. Bernanke then follows the same procedure but types more 0's. Problem solved by the same algorithm. However, this creates a problem for the little working child slave of the IRS, because after he pays higher interest and taxes to his owner, he has nothing left to himself. Bernanke saw the problem, and he types more 0's for social welfare. Problem solved.
This proves that any countries that manages its own currency (in contrast to Greece) cannot possibly have credit or debt problems.
I am angry. Please enlighten me.
Second, the Fed can create credit out of thin air. Just call this Federal Reserve Note the Bernanke Vapor (or Bernanke Gas).
Third, the world is addicted to this Vapor and thinks it smells good. Wars have been fought over it; people work their asses off the obtain it; they even risk their lives for it. They trust the Vapor.
Now the debt with interest.
The total US sovereign and public debt is in the amount of X (that is all the debt to China, Japan, and all the medicare, social security debt now and in the future), and the total interest on X is Y. Now Bernanke goes to a Fed computer and types enough 0's following a 1 so that this number is >= (X + Y); he then wires this amount of Vapor to China, Japan, and medicare and social security. Debt and interest paid, and all Americans live happily ever after.
Here is the catch: China is worried about drug overdose on Vapor and the Vapor quality, and demanded higher interest. Bernanke then follows the same procedure but types more 0's. Problem solved by the same algorithm. However, this creates a problem for the little working child slave of the IRS, because after he pays higher interest and taxes to his owner, he has nothing left to himself. Bernanke saw the problem, and he types more 0's for social welfare. Problem solved.
This proves that any countries that manages its own currency (in contrast to Greece) cannot possibly have credit or debt problems.
I am angry. Please enlighten me.
