Bankruptcy and currency

[Wienish]

Hey guys,

I've been thinking of 2 little questions for a pretty long time.. Or at least I've thought about them, forgot about them and started thinking later on.

1. What EXACTLY happens when a country gets bankrupt?
2. Aren't there any gaps in the currency? Like if I have 1,000 EUR, that is worth 1,350 USD, I change the 1,350 USD to lets say 1,500 GBP, and change that back to EUR and get about 1,200 EUR? If you guys understand what I mean?

I'm sorry if this is in the wrong part of the forum!

Greetings, Wienish

 

[Danoff]

Hey guys,

I've been thinking of 2 little questions for a pretty long time.. Or at least I've thought about them, forgot about them and started thinking later on.

1. What EXACTLY happens when a country gets bankrupt?

They either inflate their currency by printing money to pay off debt, default on debt, or both. Inflation has horrific consequences on economic growth, and defaulting on debt can start wars or civil unrest. None of it is good, and the US is staring it right in the face.

2. Aren't there any gaps in the currency? Like if I have 1,000 EUR, that is worth 1,350 USD, I change the 1,350 USD to lets say 1,500 GBP, and change that back to EUR and get about 1,200 EUR?

Nope.

 

[Joel]

I just did a little test on this site http://www.xe.com/

I put in 1000 EUR and it came out as 1363.76 US Dollars, which became 852.358 Pounds, which comes back to 1000.02 Euros. So a 2 cent difference, which fluctuates daily with the currencies.

So yeah, no real difference.

 

[RC45]

They either inflate their currency by printing money to pay off debt, default on debt, or both. Inflation has horrific consequences on economic growth, and defaulting on debt can start wars or civil unrest. None of it is good, and the US is staring it right in the face.

And for people who might want call you a chicken little sky-falling alarmist, they should see Mexico, Brazil and Russia for practical examples of what happens when you literally wake up one morning and find you money devalued, prices through the roof and what little money you may have had in the bank confiscated or directly controlled by the state.