The next big Stock Market collapse, long forecasted, may finally be closer to reality.
I think more people would have gotten out by now, but the pull of money is a very strong emotion and temptation.
</rolling eyes>
The next big Stock Market collapse, long forecasted, may finally be closer to reality.
I think more people would have gotten out by now, but the pull of money is a very strong emotion and temptation.
I can’t blame them. Obama will have added at least $11 trillion to the debt before he leaves. We’re broke. My guess is we’ll see a devaluation of our currency within five years.
The beginning of the end.
Your point highlights the profligate spending and budget insanity. However, I think it is something to pay attention to, but not worry. Since they sold the instruments, that means there is a willing buyer. There are always institutions, states, etc., whose portfolios have US debt.
While US debt isn’t returning the highest rate, it is a very known quantity, and quality. US insurance companies hold US bonds until maturity (10, 20, 30 years). Few other institutions hold bonds to maturity for various reasons.
I remember the U.S. unilaterally abrogated the Bretton Woods agreement in August 1971 and allowed the dollar to float in relation to the trading whims involving all paper currencies. When the Treasury in 1964 began producing dimes through dollars without silver, silver coins disappeared from circulation. Until about 1968 people could still trade their Federal Reserve notes for Silver Certificates and trade those for packets of silver from a Federal Reserve Bank. At this time the working careers of a single generation comprise the totality of comprehension for how the international community was to function economically without important currencies emerging from things people can touch and see.
An individual country might think they have a solution, but they know they must also survive during the resulting chaos as all countries seek similar solutions. They see the daunting specter of disaffected holders sending 10’s of billions of dollar denominated bonds to the marketplace when there are no buyers unless prices are severely discounted. They are also frightened by the image of a devastated U.S. economy, because feeding the insatiable desires of U.S. consumers has been a mainstay of their prosperity. I imagine something like the final scene in “The Good The Bad and The Ugly”. The members of the G-20 are standing in a circle with open graves behind them. They are all contemplating how they are going to successfully outdraw the other nineteen members and survive the resulting mayhem, which Lee Van Cleef’s character did not. The only thing needed now is a typical expression of human frailty to commence the cascade to catastrophe.
We should be toast along with the rest of the largest economies.
The Good, The Bad and the Ugly: http://www.youtube.com/watch?v=sXldafIl5DQ
Tax Rate to Balance Budget: http://www.taxfoundation.org/research/show/25985.html
Fy2010 Spending by Category/Department: http://en.wikipedia.org/wiki/File:Fy2010_spending_by_category.jpg
FY2010 Spending by Function: http://en.wikipedia.org/wiki/United_States_federal_budget
Policy Basics: Where Do Our Federal Tax Dollars Go? http://www.cbpp.org/cms/index.cfm?fa=view&id=1258
U.S. Funding for Future Promises Lags by Trillions http://www.usatoday.com/news/washington/2011-06-06-us-owes-62-trillion-in-debt_n.htm
What if the Treasury Defaults: http://online.wsj.com/article/SB10001424052748703864204576317612323790964.html?mod=WSJ_Opinion_LEADTop
CBO outlook on long-term debt worsens: http://thehill.com/blogs/on-the-money/budget/167781-cbo-outlook-on-long-term-debt-worsens
U.S. Debt Clock: http://usdebtclock.org/
Understanding the Budget Control Act: http://keithhennessey.com/2011/08/01/bca-understanding/
S&P Downgrades the U.S. Debt Rating: http://www.housingwire.com/2011/08/06/full-text-sp-downgrades-the-u-s-debt-rating
Cut, Cap and Balance: http://conservativedailynews.com/2011/07/cut-cap-and-balance-full-text/
Federal Budget History: http://www.whitehouse.gov/omb/budget/Historicals
S&P Downgrades U.S. Debt Rating — Press Release
http://blogs.wsj.com/marketbeat/2011/08/05/sp-downgrades-u-s-debt-rating-press-release/
Baseline Budgeting
http://en.wikipedia.org/wiki/Baseline_(budgeting)
ADDED 8/9/13
Fed Balance Sheet vs. Stock Market; Will QE Cause Inflation? US in a Minsky Bubble?
http://globaleconomicanalysis.blogspot.de/2013/08/fed-balance-sheet-vs-stock-market-will.html
Some thoughts on ‘international reserves’
http://www.plata.com.mx/Mplata/articulos/articlesFilt.asp?fiidarticulo=216
Disconnected Central Banks Can’t Last Forever
http://finance.townhall.com/columnists/mikeshedlock/2013/08/09/reflections-on-paper-reserves-of-central-banks-n1660091?utm_source=thdaily&utm_medium=email&utm_campaign=nl#
Money Morning Interview with Jim Richards
http://www.bing.com/videos/search?q=money+morning+interview+with+jim+rickards&FORM=VIRE1#view=detail&mid=696ACDBB0651B4D766F2696ACDBB0651B4D766F2
Business 50 Facts About The U.S. Economy That Will Shock You
http://www.theblaze.com/stories/50-facts-about-the-u-s-economy-that-will-shock-you/
Central Banks Have Become A Corrupting Force — Paul Craig Roberts and Dave Kranzler
http://www.paulcraigroberts.org/2015/08/23/central-banks-become-corrupting-force-paul-craig-roberts-dave-kranzler/
The Velocity of Money: Economy About To Collapse
http://www.americanthinker.com/articles/2016/01/the_velocity_of_money.html
I didn’t see in the article who is buying the Debt. It’s a good sign that our Debt can be traded.
Optimally the FED should be trying to buy up deep discount debt, as in some cases can end up at a negative interest rate — meaning somebody paid us to borrow money from them, but politicians aren’t wired that way.
So Vote Trump.
At this rate, the only way we can pay off the national debt is to seize all assets of liberals, followed by returning to the gold standard and eliminating the Federal Reserve.
