There are no defaulted US treasuries. They get repaid as Certificates of Indebtedness which like US treasuries themselves are good for tax payments in US dollars and for buying more Treasuries in US dollars.
What you won't get is Fed dollars because the US Treasury won't have any. The trade and repo in US Treasuries and CoIs will continue - and that will be the only way to get Fed dollars for them. In effect US Treasuries become perpetuals, which given the constant rollover they are anyway.
The fun only starts if coupon payments are defaulted upon. Principal payments are not an issue.
There are no defaulted US treasuries. They get repaid as Certificates of Indebtedness which like US treasuries themselves are good for tax payments in US dollars and for buying more Treasuries in US dollars.
What you won't get is Fed dollars because the US Treasury won't have any. The trade and repo in US Treasuries and CoIs will continue - and that will be the only way to get Fed dollars for them. In effect US Treasuries become perpetuals, which given the constant rollover they are anyway.
The fun only starts if coupon payments are defaulted upon. Principal payments are not an issue.