The Nightmare of German Inflation - One day everything was fine. The next day hell was unleashed

Read this first: The Nightmare of German Inflation

For those who skipped or failed (or forgot) European history: The Weimar Republic

U.S. May Join Germany of 1933 in Pantheon of Defaults

Excerpt:

Failure by the world’s biggest economy to pay its debt in an interconnected, globalized world risks an array of devastating consequences that could lay waste to stock markets from Brazil to Zurich and bring the $5 trillion market in Treasury-backed loans to a halt. Borrowing costs would soar, the dollar’s role as the world’s reserve currency would be in doubt and the U.S. and world economies would risk plunging into recession -- and potentially depression.

Comments: Imagine ... you've saved $ 1,000,000 for retirement ... but your money is worthless! (in the title 'hell was unleashed' ... not even close ... )

Who buys US Debt?

Who’s Buying U.S. Debt?: 1955-Today

Excerpt:

As we contemplate the massive amount of debt that the U.S. has managed to pile up over the years, it’s worth taking a look at who’s been loaning us the cash. This chart goes a long way to answer that question, showing the major holders of Treasury debt over time. You have to note that rather sharp uptick in Fed holdings of Treasurys lately. (The red line.) But obviously the big story has been among foreign holders, whose lending to Uncle Sam has exploded over the last 20 years.

Comment: Somewhat technical read with charts. One can still buy Treasuries at treasurydirect.gov. Years ago we bought savings bonds via payroll deduction. Wiki article

Downgraded!

United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative

Excerpt:

The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

Comment: Further on the Washington Post

Standard & Poor’s announced Friday night that it has downgraded the sterling U.S. credit rating for the first time.

The move came even though the Treasury Department said that it had found a math error in the firm’s calculations of deficit projections, according to a person familiar with the matter.

S&P decided to lower the AAA rating, held by the United States for 70 years, to AA+ after a bipartisan debt deal signed into law this week failed to assuage concerns about the nation’s growing spending.

Analysts have said a downgrade could increase the cost of borrowing for the U.S. government and lead to tens of billions of dollars in more interest costs per year. That could translate into higher borrowing for consumers and businesses, too.

A downgrade would also have a cascading series of effects on states and localities that rely on federal funding, including in the Washington metro area, potentially raising the cost of borrowing for schools and parks.

Comment: AAA for 70 years ... downgraded ... thank you President Obama!