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Napanee, Ontario | "It will only pay a higher rate on new debt and debt that needs to be rolled over."
So i thought this might come up. It is a valid point, technically speaking, and was thrown out a cpl tiems in the italy/Spain/EU debacle.
But remember how the debt market works. On confidence. Who is going to buy notes knowing that if the rest of them are evenutally rolled over at that price, no one gets their money back? People are not going to step up and buy to be the first loser. That's how Greeces rate went to 25% right? once it hit 6-8%, NO ONE bought, and so it kept going. The same people not buying at 8% arn't buying at 24%. They're not idiots.
EDIT:
"How ever it happens the government expenses will be paid and debt payments made."
I guess there is where we agree to disagree... i don't think its all that hunky dory. Neither does the FED at a trillion.2 per year right now.
Edited by OldMcdonald 11/21/2013 10:57
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It IS Different this Time.
