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Debt Ceiling Explained

May 15, 2011

The Israel attacks take some light off of the fact that the debt ceiling is supposedly supposed to be breached tomorrow. I had heard more of the perspective that the US is purposely dropping its dollar against other currencies such as China because it will make it easier for us to pay back debt because the dollar is cheaper. I dont fully understand that theory because we have nothing else to pay the debt back in but dollars themselves, which are cheapening. Maybe we will pull all the gold out of fort knox and ship it to our debtors.

It also makes our exports more competitive, theoretically bringing manufacturing and exports back into the US.

IF (and I dont it) the debt ceiling is officially breached then you would thing the dollar would take another solid shot. Will be interesting to see how all this plays out.

Here is a good link on the debt ceiling explained.

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