- Of Course We're Not Going To Pay The Chinese

This is a funny bit of video, and I like Peter Schiff in general, but in truth I don't agree with this this particular conclusion of his. And the reason I don't is that the Chinese are smarter than he gives them credit for. Eventually the Chinese government is going to say to some future Whitehouse:

"If you don't negotiate a deal with us we're going to sell all your debt tomorrow and shove America back into the 16th century. Your living standard will go in the toilet. Tomorrow the President of Khazahkstan will have more global influence than you do.

But... if you pay us 60c on the dollar today, and in tandem with that, go on the gold standard or some other fixed currency mechanism to prevent further inflation, we'll sell it all back to you right now. You can inflate your domestic bond holders to your hearts content. Your poor people will become destitute and your middle class will become poor, but at least your rich will still be rich and America will still matter.

So either we get 60c on the dollar at the new currency rate and a deal to prevent further inflation, or you get cardboard box cities, outdoor plumbing and taking your chances in the Thunderdome. What's it going to be President Pelosi?!"

The 60c on the dollar number is just off the top of my head. I think the actual number will be as much as they can negotiate at whatever the new 'inflated currency' value is.