Posted on 05/09/2016 6:09:29 AM PDT by GIdget2004
Donald Trump assailed the media on Monday for what he said was a misrepresentation of his comments on debt, rejecting the notion that he would have the United States default on his debt.
"I said if we can buy back government debt as a discount. In other words, if interest rates go up and we can buy bonds back as a discount, if we are liquid enough as a country we should do that. In other words, we can buy back debt as a discount," the presumptive Republican nominee said in a telephone interview on CNN's "New Day."
Those who said he wants to buy debt and default on it are "crazy," he added.
"This is the United States government. First of all, you never have to default because you print the money. I hate to tell you. So there's never a default. But the point is it was reported in the New York Times incorrectly," he said, referring to a critical Times article that ran on Friday.
That article examined an interview Trump gave to CNBC last Thursday in which he suggested that he could reduce the national debt by persuading U.S. creditors to accept less than full payment.
"It was reported in the failing New York Times and other places that I want to default on debt," Trump said. "You know, I'm the king of debt. I understand debt probably better than anybody. I know how to deal with debt very well. I love debt but you know, debt is tricky and it's dangerous and you have to be careful and you have to know know what you're doing. If there's a chance to buy back debt as a discount, interest rates up and the bonds down and you can buy debt. That's what I'm talking about."
(Excerpt) Read more at politico.com ...
It is amazing how many sane people would consider a national debt default before implementing trade import tariffs. It is like as a nation we are suicidal.
The liquidity injected into the banking system did not show up as loans to support business operations; but, as stock investments by the banking system. Monthly print from Treasury had to go somewhere-—and that turns out to be a large bubble in stock valuations.
Not in those countries with which we have reciprocal trade agreements, and if there are tariffs on some of our goods we have tariffs on some of theirs.
Other countries can't retaliate because the have already used up their ammo.
Ah, the old "magical thinking" policy. We slap big tariffs on our trading partners yet our exports don't suffer.
All wrong.
If it was literally “kept in their pockets” the additional cash would be meaningless. Of course, NEVER in a billion years would it be kept in their pockets. There might be one in a billion people who received a $10 mill windfall who would not spend some of the cash.
When the Cadillac dealer has 5,000 people show up on his lot on Monday morning, as opposed to the usual 10 people, do you seriously maintain that the price of the Caddys would not change?
When 150,000 people show up on the beach front property on Monday, instead of the usual 2, do you seriously maintain that the price of the property would be unchanged?
This is incomprehensible lunacy.
“The benefits of protectionism:
repatriation of industry
general increase in economic activity
decreasing or no trade deficits
balanced Federal budgets
higher levels of baseline employment
less social stress
less political will for socialism
increased national security
raising interest rate will not crater the economy.”
*****************
This is a wonderful list. Brazil has one of the most protectionist trade policies in the world. It includes approximately 40+% tariffs for imported manufactured goods. Can you explain to us why they haven’t reaped these wonderful benefits?
Post #20 - Great smackdown!
Might be an incentive to source those items locally?
Imported shoes have a 40% tariff. Yet, we are still importing 99.99% of shoes. When will shoe manufacturing move back to the US?
True.
The USA is not Brazil. The USA still has a manufacturing base that can be regenerated. Brazil is a corrupt country run by an oligarchy who keeps their peasantry uniformed and uneducated. The USA is headed that way unfortunately.
what an idiot....
I dunno but if that revenue is preventing increases in income taxes then it is a good thing. Maybe a 100% tariffs on shoes is in order.
In general textiles and shoes are outliers. Most manufacturing is not that hands on.
“Borrowing money into existence ...”
Don’t we put “created money” into circulation by lending it? To put this into financial jargon, the U.S. buys bonds, which means the borrowers get the money and the U.S. gets a promise to pay it back.
Thus, theoretically, printed money will be paid back and thus eventually be taken out of circulation?
I have no particular point here ... just wondering out loud about how this works.
That dollar bill in your wallet would probably be worth about 5 cents — if you’re lucky.
He’s right. If interest rates went up, the value of the bonds would be reduced, because new bonds would pay more. Those bonds could be bought back at below face value.
The US Treasury creates money out of thin air and gives it the Federal Reserve that can only do one thing with it and that is to buy US Treasury bonds. It is really a snake eating its own tail thing.
Trump early on talked about a Default and indicated he would default on external debt first.
The fact of the matter, and Trump understands this perfectly, is that if we don’t get deficit spending under control, the debt under control then at some point just paying the interest on the debt, along with health care cost, are going to eat the budget up and then we will have to Default.
We can’t continue to print money to solve the problem, QE 3 or 4 is coming and it is going to be ugly.
Just a question for you.
Do you own at least 40 plus multi-hundred million properties around the world in at least 13 different countries?
Do you have the contract to refurbish the old D.C. post office, bringing on-line a year earlier than projected and under budget?
If so, then you can say Trump has the intelligence of a 3 year-old.
It’s very much like “as a nation” we are suicidal; but to be fair—this is Trump’s utterance and his alone.
I am generally supportive of Trump but sometimes he comes out with ideas that are quite goofy. This is one of them.
It'll also be an incentive for local sources (if they exist) to raise their prices in response to the demand. If local sources do exist, the increased demand will be incentive for them to raise prices, and you may be waiting for some time to get some things because they're suddenly on backorder.
All of that will be an incentive to increase production, but the producers are going to have to be convinced the tariffs are going to stay in place long enough for them to see a return on their investment.
Initially, it's going to be painful. Theoretically, it will eventually stabilize but if people are still feeling the pinch by the next election it's going to put Trump in a very bad position.
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