That’s where this train is headed. From Egon von Greyerz at goldswitzerland.com:
With US and Global debt exploding prior to both assets and debt imploding, let us look at the disastrous consequences for the US and the world.
Debt explosion leading to the currency becoming worthless has happened in history for as long as there has been some form of money whether we talk about 3rd century Rome, 18th century France or 20th century Weimar Republic and many many more.
So here we are again, another monetary era and another guaranteed collapse as von Mises said:
“There is no means of avoiding the final collapse
of a boom brought about by credit expansion”
This disastrous borrowed prosperity, with ZERO ability to repay the surging debt, will lead to one of the three consequences below:
1. THE US$ GOES TO ZERO
2. A US DEFAULT
3. BOTH OF THE ABOVE
The most likely outcome is number 3 in my view. The dollar will go to ZERO and the US will default. The same will happen to most countries.
I outline the consequences for the world at the end of his article.
Many people say that the US can never default. That is of course absolute nonsense.
If a country prints worthless debt that nobody will buy in a currency that no one wants to hold, the country has definitely defaulted whatever spin they put on it.
In the next few years, not just US but all sovereign debt will only have one buyer which is the country that issues the debt. And every time a sovereign state buys its own debt, it has to issue more worthless debt that nobody will touch with a barge pole.
Printing more money to pay for previous sins has never worked and never will.