the Depression2013

Let’s take China , for example. They said that China did not want to purchase US debts, but they had no other choice: debt instruments in other currencies will not be enough for China . One has to acknowledge that the dollar remains the main reserve currency, and there is no replacement to it. That is why all countries will have to purchase those bonds no matter whether they are willing to do it or not,” the expert said.

	USA prepares to immortalize its huge debts
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America may issue a new world reserve currency to run away from its debts.

“The amero was thought to be this new currency a month ago. Now they talk about the SDR – Special Drawing Right Currency issued by the International Monetary Fund since 1981. The non-cash SDR is based on the basket of the dollar, the euro, the yen and the British pound. The dollar share amounts to a bit more than 40 percent in the basket. If SDR bank notes become materialized, the dollar may drop against the new payment instrument, which will subsequently devaluate the US debt,” Aleksei Vyazovsky said.

Natalia Lesina, an analyst with Alor Group of Companies, believes that the US debt can disappear as a result of hyperinflation.

“The USA is currently conducting a program to support various financial structures and the real sector of economy, which naturally increases the state debt. Hyperinflation seems to be the most probable progression of the debt issue,” the expert said.

“They will now restructure the debt to make it longer. However, they will have to repay the debt someday anyway. That’s why it seems to me that the USA will prefer to turn its printing machines on and push the dollar devaluation idea aside. We will see the first vestiges of the inflation already next year. It will be a very painful process for the economy, but the problem will be solved,” the expert said.