I’ve saved up some money to buy a home in 3-4 years. My financial advisor told me to invest it in US Treasuries since he says they have no credit or default risk.
What do others think? Is it safe to assume US Treasuries will never default? Or should I diversify and add things like short-term municipal bonds?
If they ever default, money will probably be the least of anyone’s worries.
Scout said:
If they ever default, money will probably be the least of anyone’s worries.
Exactly. The whole world economy is so tied to the dollar that a collapse would cause chaos globally. It’s not impossible, but something catastrophic would have to happen for the US to default.
@Briar
Technically, the US can only default if it chooses to. All loans are in dollars, and the US controls the printing of those dollars.
Two scenarios where it might happen:
@Branley
That second one isn’t as unlikely as it sounds. Politicians love to play chicken with the economy.
Frost said:
@Branley
That second one isn’t as unlikely as it sounds. Politicians love to play chicken with the economy.
Yep, and that’s why the US credit rating has been downgraded before—too much brinksmanship in Congress.
Frost said:
@Branley
That second one isn’t as unlikely as it sounds. Politicians love to play chicken with the economy.
I mean, they probably like their own money and comfort too much to let it go that far, right? 
@Branley
Yeah, expecting Congress to work together is like expecting me to suddenly grow a foot taller. Not gonna happen. 
Scout said:
If they ever default, money will probably be the least of anyone’s worries.
Realistically, we’re more likely to see a technical default, like a delay in payments because of debt ceiling fights. It wouldn’t be catastrophic, but it’d still be bad. You’d still get your money, though.
@Winslow
Debt ceiling arguments are like eating the cake and refusing to pay the baker.
Jasper said:
@Winslow
Debt ceiling arguments are like eating the cake and refusing to pay the baker.
Kinda, but not exactly. If the government overspends, one option is just to cut back on future spending instead of raising the limit. Think of it like deciding not to book a flight when you’re already close to maxing out your credit card.
@Marlow
But isn’t the spending already approved? It’s like grabbing snacks at the checkout and then refusing to pay.
@Marlow
Exactly, that’s what makes it ridiculous. They approve the spending but don’t want to raise the limit to cover it.
Scout said:
If they ever default, money will probably be the least of anyone’s worries.
If the US defaults, we’re in big trouble. Think nuclear war levels of chaos, where survival is the only thing that matters.
@Rory
Wait, why are your kids glowing blue in this scenario?
Devon said:
@Rory
Wait, why are your kids glowing blue in this scenario?
Cherenkov radiation. It’s a joke about nuclear fallout.
Devon said:
@Rory
Wait, why are your kids glowing blue in this scenario?
Yeah, glowing kids are just part of the dystopian vibe, I guess.
@Rory
In that case, all you’ll need is food, ammo, and medical supplies.
