Washington lends its own currency, which it can issue if necessary, while other countries, such as Argentina, borrow in foreign currency and cannot resort to the US strategy.
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Berkshire Hathaway President and CEO Warren Buffett said he does not believe the US it defaults on its debt while borrowing $ 3 trillion to deal with covid-19, and shared its vision of why the American country is immune to the threat of failing to meet its monetary commitments.
“If you print bonds in your own currency, the question is what will happen to the currency, but you will not default on the payment,” the investor said during the Berkshire Hathaway annual shareholders meeting, according to Yahoo Finance.
“The United States has been smart in issuing its debt in its own currency,” Buffett said, adding that other countries chose a different strategy.
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“Argentina now has a problem because the debt is not in its own currency,” said the businessman.
“Many countries have had that problem and many competent countries will have that problem in the future,” he supposed, stating that, himself, “if he could issue a Buffett coin, and have a printing press and could borrow money, he would never be incapable to pay. “
At the same time, he warned that too strong an issue may result in unnecessary inflation. “What you end up getting in terms of purchasing power may be in doubt,” Buffett said.
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