Rhonda D Johnson profile image 77

What did the US use for collateral when we borrowed money from other countries?


We know that the US government has borrowed billions of dollars from China, Japan and other countries. But what did we use for collateral? I've been told that the United States is actually a corporation. When a corporation goes belly up, it's assets are used to pay its debts, thus protecting the personal profits of its executives. So when they say "of the people, by the people and for the people" does that mean that WE are the collateral? Is this why the wealthy are trying to get as much money as they can so they can pay cash if this nation goes under, while the rest of us become slaves?

 

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stanfrommarietta profile image79

stanfrommarietta says

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3 years ago
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    stanfrommarietta 3 years ago

    The risk of devaluation of the currency does not come from just printing more money. Values of monetary units are negotiated between parties in exchanges of goods and services in setting prices. Until then more money cannot itself devalue money.


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LandmarkWealth profile image85

LandmarkWealth says

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4 years ago
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    Rhonda D Johnson 4 years ago

    Landmark, I apologize for not being clear. I did not say JFK took us off the gold standard. I said he tried to take the power to print currency from the Federal Reserve and give it back to the government.


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JohnfrmCleveland profile image83

John (JohnfrmCleveland) says

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3 years ago
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    LandmarkWealth 3 years ago

    I'd be careful with the term 100% safe. If you bought a 10 year treasury on January first you've lost money when yields jumped nearly 100%. There is no such thing as a riskless investment. Treasuries carry interest rate and inflationary risk.


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Rhonda D Johnson profile image77

Rhonda D Johnson says

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4 years ago
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    Larry Wall 4 years ago

    The U.S. has been on the gold and silver standards. We have assets in Fort Knox--not enough to cover the debt. Tthe strength of the dollar, which are basically promissory notes, is strong enough for most investors. We do need to limit spending.


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Earl Owens profile image60

Earl Owens says

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21 months ago
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Larry Wall says

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4 years ago
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    stanfrommarietta 3 years ago

    Merely creating new money does not necessarily cause devaluing of currency. It depends on how much is actually in circulation chasing goods and services. Imports, taxes drain the money from circulation and new money may simply replace that.

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AndriyR says

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4 years ago
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    Rhonda D Johnson 4 years ago

    Consumers and tax payers keep the economy moving, but we buy things and pay taxes with the dollar that is not real money because it has no gold or silver backing it. How can the gov't use fiat money as collateral?


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