Quote Originally Posted by socal View Post
Quote Originally Posted by Thormaturge View Post
Higher interest rates equate to greater unemployment, more foreclosures, and more control of the economy returning to Wall Street. The middle class will be the ones to suffer.

For the wealthier members of the community it means higher investment income and consequently more money in the bank which they will do nothing with.
The best thing for the US is to default and let the old system crash and burn. Short term pain, long term gain. That is what Asia did in 1997 and now they are ahead of the game. And the bankers in Asia got shafted too.

After the 1997 crash, Thailands economy already started to improve in 1999.

-By 2001, Thailand's economy had recovered. The increasing tax revenues allowed the country to balance its budget and repay its debts to the IMF in 2003, four years ahead of schedule. The Thai baht continued to appreciate to 29 Baht to the Dollar in October 2010.

=The South Korean Won, meanwhile, weakened to more than 1,700 per dollar from around 800. Despite an initial sharp economic slowdown and numerous corporate bankruptcies, South Korea has managed to triple its per capita GDP in dollar terms since 1997. Indeed, it resumed its role as the world's fastest-growing economy—since 1960, per capita GDP has grown from $80 in nominal terms to more than $21,000 as of 2007
The problem I see with this is that the USA and Thailand have entirely different economies.

Thailand was able to recover because its markets, especially the USA, were still willing to buy its produce. If the USA fails I do not see there being a large customer willing to buy its products, but more likely a large predator wanting to buy up the entire country at bargain basement prices.

An American default would be a gift to the Chinese.