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This argument is fallacious (not that its not kicked around a lot).

The point is that the US treasury will pay its debt. The value of the dollar simply a different question.

By your argument (and apparently, some of the rating agencies'), a supposedly necessary downgrading of treasure bonds would require the downgrade of every existing dollar denominated bond in the world - ie, nearly every AAA bond. Oddly enough, Moody's isn't threatening to do this.



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