Quote:
Originally Posted by alpha phi
When we go into default can those "foreign investors, banks, insurance companies, and others" call in their loan to be paid in full?
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We are not going into default. If you hold a treasury note or bond, you redeem them when they mature. If the French government has a billion in 10 year treasury bonds, they come due in ten years. The government can re-finance the bonds or they can pay it in deflated currency when they mature. Either way there will be no default.
There is a secondary market. If France wants to sell its bonds to Canada, they can do that anytime they want. France might make or loose money on the deal. Or, in some cases the Fed may go into the market to buy bonds in their effort to manage the money supply and interest rates.