Donald Trump just threatened to cause an unprecedented global financial crisis

The United States of America, however, is not a real estate development company. If a real estate company defaults on its debts and its creditors lose money, that's their problem. If a bank fails as a result, then it's the FDIC's responsibility to clean it up.

The government doesn't work like that. Right now, people and companies all around the world treat US government bonds as the least risky financial asset in the universe. If the government defaults and banks fail as a result, the government needs to clean up the mess. And if risk-free federal bonds turn out to be risky, then every other financial asset becomes riskier. The interest rate charged on state and local government debt, on corporate debt, and on home loans will spike. Savings will evaporate, and liquidity will vanish as everyone tries to hold on to their cash until they can figure out what's going on.

Every assessment of risk in the financial system is based on the idea that the least risky thing is lending money to the federal government. If that turns out to be much riskier than previously thought, then everything else becomes much riskier too. Business investment will collapse, state and local finances will be crushed, and shockwaves will emanate to a whole range of foreign countries that borrow dollars.
Donald Trump just threatened to cause an unprecedented global financial crisis

I wonder how a 69-year-old man with all of Trump's education and life experience could not already know the contents of the article above.

To those who think that Trump is somehow talking about a revolution against bankers, the Federal Reserve was created by an act of Congress and it could be disbanded with an act of Congress. I don't see how Trump's plan discussed above would hurt the power of bankers in any way.

Trump's plan discussed above is so mind-boggling to me, I'm wondering now if he's trying to lose the election.

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