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Forums Home // The Prison Yard // can someone explain this american debt thing to me and why it impacts on our economy... D:

can someone explain this american debt thing to me and why it impacts on our economy... D:

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14 years ago  #41
JCsucks
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Originally posted by JayMeal America's currency is fiat currency which means it's not backed by anything, it instead gets it's value based on the reliability of the United State's government, when we were on the gold standard worst case scenario, the dollar was also valued the same as gold, meaning if the US economy went down, the dollar would still be worth something. The dollar use to be a kind of certificate, you could go to the bank, and get it's worth in gold. If gold went up the dollars value went up world wide, etc.

The US dollar is a world currency world banks use dollars in their reserves, so if the US dollar becomes valueless the whole global market suffers, any institution that deals with US dollars suffer, which is why big governments like China are invested in gold, becaues gold has a value on the market which is very high. China also has huge reserves of dollars because they (use to be) reliable to hold on to, not the case anymore.

The US has a debt ceiling, the US spends more than it makes, and there's a cap on this. If it ever reaches the cap by law the US can't borrow anymore money and will have to start making MORE money than it spends (novel idea right) if it can't it will default and the economic crisis can ensue (similar to what happened in greece only on a world scale because again the dollar is a world currency)

All confidence will be lost in the dollar making it worth as much as the shit stains in your toilet.

That's my basic understanding of the economy anyway.

alot of truth...dollar started going down hill when we got OFF of the gold standard. allowed the federal reserve to "print $" to inflate the economy.

interesting fact....only currency crude oil is priced in is the US Dollar. so b/c our federal reserve has printed $ to try and get us out of this recession, there are more of them in circulation, it's arbitrarily driven up the price of crude and hence gas.

"thats not gross. gross would be sayin i'd suck a fart out her ass and hold it in like a bong hit"- rogerharkey in reference to his love for selena gomez (quote of yr)
14 years ago  #42
hanako
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didn't hitler print a whole heap of cash during world war too to try and make more money

14 years ago  #43
nickrox
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good job jay..nicely explained

but the part that i find funny..is anytime their is a natural disaster in the world..the US forks out millions in help and resources..but when something happens here..i have NEVER heard of another country helping us...maybe i didnt tune in at the right time..but never heard it

14 years ago  #44
hanako
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we helped with new orleans... lots of countries did

14 years ago  #45
JCsucks
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Originally posted by hanako we helped with new orleans... lots of countries did

thank you, you're right...problem is alot of THAT money was misused.

we're back to misuse of funds and greed. root of a lot of our problems in the USA

"thats not gross. gross would be sayin i'd suck a fart out her ass and hold it in like a bong hit"- rogerharkey in reference to his love for selena gomez (quote of yr)
14 years ago  #46
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Originally posted by hanako we helped with new orleans... lots of countries did

that may be...but i never heard it..prob just our dam media..lol

14 years ago  #47
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14 years ago  #48
hanako
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okay ... so no panic lol... except that you guys gonna feel some cuts?

14 years ago  #49
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Originally posted by hanako okay ... so no panic lol... except that you guys gonna feel some cuts?

we gonna be cutting some douche bags outta congress..lol

14 years ago  #50
hanako
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lol... your politcal system is soooo complicated.. ours is nice and easy

 

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