What happens as DC edges toward default.
Money flows to the exportable industries faster than Congress can borrow. Oil, lumber, minerals, and manufacturable exports get the higher and DC gets the negative real rates of return. DC and the MidAltalntic go into poverty, that town and a major portion of NYC have no money. Texas and Canada will immediately have money, very liquid letters of credit for future and current oil shipments oil, much of it to China and Europe. Same for the Northwest lumber, And all Agriculture.
What happens to Socialist banking? The regional Feds goes to work, and agree with Ben that exporting region bonds, commercial and municipal are collateral. The NY Fed is bankrupt and nonfunctional.
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