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What is the significance of our debts
to foreign countries or foreign citizens?
In my opinion, Foreign debt in any form -- Bonds, dollar bills, electronic entries,
contracts or whatever are all basically and functionally the same if they
(a) carry a promise to pay in dollars or (b) are, by practice and custom, always
able to be used to buy goods and services in the United States that are priced in dollars.
That debt, from the standpoint of the foreign country, can therefor, be used to
(a) pay debts to The United States, (b) buy U.S. goods, services, real estate and
businesses in the United States, and (c) trade for more recent printing of U.S. dollars.
Even if our goods and services were to have zero true value -- that is a problem for
the holder of the debt. We do not have to do any more than accept the dollars as
payment for goods and services and in the settlement of our debt to those countries.
In conclusion, foreign debt is nothing to worry about.
Unless the debt is, by contract, collectible in Gold -- and then we have a problem.
Unless we have a good lawyer who successfully argues that the contract that established
the debt was impossible to fulfill when it was written because the world does not have
enough gold to fulfill that debt and both parties to the contract knew that to be a fact.
Impossibility of performance negates, voids or nullifies contracts
It can always be argued that the common practice of all countries has always been to
allow the payment of debt to be satisfied by the transfer of goods normally traded
between the two countries involved at existing market value.
And if that does not work -- we always have the might to make the negotiations turn out right.
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