Kasz216 on 12 November 2013
Mr Khan said:
Governments can only default when they don't control their own currency, or don't have their debt denominated in their own currency. The big players, therefore, are completely immune to default while we remain in a liquidity trap.
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I don't believe any country has their debt completely denominated in their own currency.
The US for example has about 1 trillion dollars in debt owed in foreign currency.
Which sounds small compaired to the 16 trillion it owes in dollars... but if you start inflting the dollar to pay off that debt... it'd get much higher. So it serves as plenty big enough balance to avoid simply trying to infalte out of the debt.
So the US could totally default.
