[Snowrunner]

$this->bbcode_second_pass_quote('sittinguy', 'T')he Military will be the last to run out of fuel.. If you disagree with that you are a dumbass

[Snowrunner]

$this->bbcode_second_pass_quote('Cid_Yama', 'W')hen the credit line is cut, we'll be lucky to get our troops home.

[virgincrude]

Okay, yeah, lot's of 'off the top of my head' replies. Thanks, I have plenty of those myself. Maybe too much to expect more people to actually think it through, like Cid and galacticsurfer have ...

sittinguy wrote:

$this->bbcode_second_pass_quote('', 'S')ocial collapse
hoarding
civil/race/class wars
starvation/ die off
all cats and dogs get eaten
100% unemployment, for at least a year
possible nuclear wars
chicken ala king,, yum"

[ReverseEngineer]

Complete monetarization of the debt is about impossible, even running the presses 24/7, but there are other ways out of a default. Negotiations with the Creditors for a debt reduction no doubt will be taking place. If we default, we bring down the creditor nations with us, so they will be willing to negotiate here. Its an exercise in Brinkmanship of course. Who will BLINK first? In the game of Chicken with two cars driving straight at each other, who turns the wheel first and careens off the roadway?

This process could draw out the end game some, but of course the bottom line here is a mass bankruptcy due to overshoot, so some folks gotta die. How they will die is the main question.

Insofar as credit stoppage preventing the US from bringing the troops back home to fight the internal battle on our own soil, this would be unlikely. If there is a complete lockup of trade, the US will of course engage in Gunboat Diplomacy. Any offshore oil rigs will be pirated, and there really is not another Navy in the world that could stop that. The question would be whether outright theft of all the offshore oil rigs still functioning would motivate someone with a Nuke to fire it off. We could bribe nations with some Nukes not to fire them at us by generously sending some of the oil we pirate their way, along with some of the food we produce with our newfound source of VERY cheap oil, since we didn't have to pay for it but just stole it

This scenario basically leaves all non-Nuke countries to Twist in the Wind and fend for themselves. All of Africa is of course Toast in this scenario, far as death rate goes from hunger anyhow. South America is also pretty much toast in this scenario.

Internally in the US, once we default on all the debt, there no longer is pressure to service that debt, and so you could just continue on with the dollar as currency within the country. Wouldn't be worth jack squat outside the country, but would work fine inside, especially with lots of new FREE Oil stolen from everyone else who does not have such a good navy.

The derivatives problem is mostly one of counterparty risk, but of course once you Nationalize all the Banks and all the industries, there ARE no counterparties! All those contracts are basically meaningless then, you would just be paying yourself since you own it all anyhow.

At this point it then becomes necessary to actually make a real economy work inside the country, which in theory would be possible with all the new Stolen Oil. However, the folks you stole it from will be none too happy about this, and while they don't have Nukes, they certainly can make life pretty miserable through terrorism. You gradually will see more of the offshore rigs taken off line with small missiles and rockets from the nearby countries you are trying to starve out of existence. War profiteers of course will happily sell these arms to anyone, and while the Ruskies don't build such nice aircraft carriers as we do, they do make perfectly serviceable small missiles that will do an effective job of rendering an oil rig quite useless, if not actually sending it down to Davey Jones Locker.

Of course, if you get the Ruskies to buy into the game, you might avoid this kind of end game, but thing is the Ruskies in charge still themselves DREAM of World Domination, and of course also Gary Kasparov is a mighty good Chess Player. No dummies those Ruskies, even if they are on the Ruthless side. LOL.

You won't see Bankruptcy declared here too soon, Ben and Henry will keep printing the money and there will be continuing negotiations behind closed doors for the next year or so I would imagine. The internal mechanics will continue to break down, but perhaps on the SLY already we are direct stealing Oil from Petrobras to keep our Gas prices down so low. I find it hard to imagine that mere demand destruction has been able to accomplsh this, but maybe.

I'm backing off the SUPER fast crash down to Mad Max levels with this analysis. I think through a combination of currency manipulation, negotiations with the creditors (specifically the Chinese), and the outright theft of Oil through Piracy on the High Seas, the Military State that is the US can continue to function for another couple of years.

Of course we still do have to deal with all that Methane making its way out of the Clathrates and into the atmosphere, and we do have to remember that in a game of Brinkmanship like this, its always possible that someone gets tired of the game and pulls the plug on the Nukes, but on the assumption neither of thoe two things snuff us out in the next year or two, you could see a pretty interesting endgame, and those in their Bunkers already will have missed it. Or at least missed chatting about it with us here on Peak Oil anyhow. Wonder how Cash and Rocc are doing these days?

Reverse Engineer

[Snowrunner]

$this->bbcode_second_pass_quote('ReverseEngineer', 'C')omplete monetarization of the debt is about impossible, even running the presses 24/7, but there are other ways out of a default. Negotiations with the Creditors for a debt reduction no doubt will be taking place. If we default, we bring down the creditor nations with us, so they will be willing to negotiate here. Its an exercise in Brinkmanship of course. Who will BLINK first? In the game of Chicken with two cars driving straight at each other, who turns the wheel first and careens off the roadway?

[outcast]

$this->bbcode_second_pass_quote('', 'w')hat does it mean for China and Japan, the largest holders of US debt:

[ReverseEngineer]

$this->bbcode_second_pass_quote('Snowrunner', '
')But it's a nice dream, keep dreaming.

[vtsnowedin]

$this->bbcode_second_pass_quote('virgincrude', 'v')tsnowedin:

[quote]"I don't know as your premis is true"

[RacerJace]

$this->bbcode_second_pass_quote('Cid_Yama', 'Y')eah, Yeah and the US is the greatest, most powerful nation in the world. Yada, Yada, Yada.

When the credit line is cut, we'll be lucky to get our troops home.

When the US defaults, the dollar tanks immediately.

[MrBean]

Federal state has been borrowing not the standard 2 billion per day of Bush years, but 20 billion daily since September. Instead of half a trillion per year US is now adding half a trillion per month. Can't keep that up ad infinitum, question is, how many months more before collapse a la Island (but no IMF for rescue for US)? At 14 trillion (by June?). At 20 trillion? (by end of FY 2009?).

What the French thinktank is predicting seems to be that US will replace the old dollar with heavily devaluated new dollar - official default would be unconstitutional. What that means? New USD is no more the global reserve currency, US cannot buy oil etc. merely by printing currency but will have to barter real products (what???) for imports. Yep, that means US will have to suddenly produce and transport food etc. with less than half of current oil consumption. The death of the American Consumer, the birth of the American Surviver.

It will not be pretty, but it will have strange beauty of it's own kind, PO beauty (also known as "doomer porn" ).

[pup55]

$this->bbcode_second_pass_quote('', 'W')e need to borrow to roll it over. Foreign nations who are our creditors are showing an unwillingness to purchase any more US debt.(loan us any more)

[MrBean]

$this->bbcode_second_pass_quote('ReverseEngineer', '
')
Just a THEORY, not a DREAM, and by no means do I consider this a very good outcome for the Planet Earth or its people. It is however a PLAUSIBLE scenario, and you haven't really proved by any means that its NOT POSSIBLE. You haven;t even really shown its implausible EITHER.

Reverse Engineer

[galacticsurfer]

Knock three zeroes off dollar.

[MrBean]

$this->bbcode_second_pass_quote('galacticsurfer', 'K')nock three zeroes off dollar.

[Snowrunner]

$this->bbcode_second_pass_quote('MrBean', 'R')ussia would still keep on delivering barter oil through pipelines to EU and China in return for various goods, so US would be the biggest looser, not mentioning the total trade blockade that rest of the world would impose on the Pirate Nation.

What is interesting is that once US is toast, the now flagless Pirate Navy could start oil and gasoline piracy on their own, just to keep themselves afloat for a while.

[Snowrunner]

$this->bbcode_second_pass_quote('ReverseEngineer', 'H')owever, offshore oil fields differ from the fields in Iraq or Iran in that they are much more susceptible to being hijacked by a Navy. It would be darn hard for any low tech locals to be succesful in bombardment, since as soon as you toss off one rocket, you give away your position and basically bring down the fires of hell on that location. I do not think in such a case the US Military will worry whether the missile was fired from a Children's Hospital or not, they will level it regardles.

[virgincrude]

Vtsnowedin: $this->bbcode_second_pass_quote('', '"')I don't know": An expression conveing doubt or uncertainty, An admission of incomplete command of the facts, lack of all knowing ness,

[threadbear]

Generally speaking, in the last few decades countries who default are red meat for the IMF. The IMF is running out of funds, but can actually create it's own currency, some kind of bond, to lend to the federal reserve. The IMF insists on draconian austerity, like 12% rate of return on the loans it doles out, elimination of federal social programs, etc... In the case of the US, they'd go after the military budget too, possibly.

[MrBean]

$this->bbcode_second_pass_quote('threadbear', 'G')enerally speaking, in the last few decades countries who default are red meat for the IMF. The IMF is running out of funds, but can actually create it's own currency, some kind of bond, to lend to the federal reserve. The IMF insists on draconian austerity, like 12% rate of return on the loans it doles out, elimination of federal social programs, etc... In the case of the US, they'd go after the military budget too, possibly.

[threadbear]

$this->bbcode_second_pass_quote('MrBean', '')$this->bbcode_second_pass_quote('threadbear', 'G')enerally speaking, in the last few decades countries who default are red meat for the IMF. The IMF is running out of funds, but can actually create it's own currency, some kind of bond, to lend to the federal reserve. The IMF insists on draconian austerity, like 12% rate of return on the loans it doles out, elimination of federal social programs, etc... In the case of the US, they'd go after the military budget too, possibly.