Government bonds? What if the government goes to hell in a handbasket, then what?

Question

Is this a far-fetched scenario?? Critics of America (and by extension, capitalism) always cite how Spain and ancient Rome were once dominant and that America is headed for collapse ... Your comments are appreciated. Thanks

Answer 1

When the Russian czar was deposed in 1917, all Russian bonds became worthless because the government no longer existed.

If the US government were to cease existence, all of its obligations would become worthless and only natural resources like gold and diamonds would have any intrinsic value.

Answer 2

The bonds would be worthless.

Given that the US has been around for over 231 years and hasn't defaulted on a bond payment yet, I'm comfortable with the safety of US Government bonds.

Critics of the US have been saying that the US was headed for collapse pretty much day one. The closest we came was the Civil War and we eventually got past that one intact. True, the bonds issued by The Confederacy were rendered useless, but those were not issued by the US Government.

Answer 3

I would have to disagree that the Roman Empire collapsed. They merged with another company which is now called Wallmart.

United States Government bonds by far are one of the most dominate metrics in the "International" investment community. A slight change in their value has a downstream impact to most markets including the international arena.

If our government goes south, the money in our pockets, house values and everything else will be frankly worthless. Afterall that $20 bill in your pocket is merely an extension of the bonds themselves as they are also backed in good faith by the government.

A collapse to American interests is unlikely at best as there are too many countries that our mutually invested. The international community would be decapitated of all of its U.S. imports which it relies upon.

Answer 4

Your opening sentence is the best answer anyone here will ever give you! Government bonds may not be a great investment but for other reasons and certainly not for the reasons you are thinking.