I did not know this until recently, but apparently it is mostly short-term debt. Bills and notes. I would have thought they would have locked in the low interest rates.
National debt and working Americans
- Thread starter FireWalker
- Start date
I did not know this until recently, but apparently it is mostly short-term debt. Bills and notes. I would have thought they would have locked in the low interest rates.
But then, I now realize the bond-buyers (slave masters) are waiting for a better return on their money.
Mortgages must confuse you. Do you think the US lacks the assets to back their debt as needed ? Do you think they will miss some payments ? Is there some benefit to the lenders to demand full principal back, or does that not just mean any number of other private lenders can loan the money ?
You really haven't thought this out. I take it you are like S2007S, some single guy who rents an apartment, lives pay check to pay check, and makes their own sandwiches. It is understandable for world wide monetary policy to confuse you. So like S2007S, you post absolutely meaningless observations about these topics. Does Fort Knox have any bearing on US debt to China ? No. Does a home owners mortgage depend on having gold bars in a safety box ?
Recently, early 2015, China experienced a little capital flight and apparently, so I read, sold some US treasuries. Their equity market swooned as did emerging market equities as US interest rates rose. At the same time the Europe bond route was under way (hmm..)and the 10 year bund spiked to 100bp.
I still think the world has to show up at US treasury auctions and bid heavily for their own
Good. Shorting UStreasuries may join JGb's as a widowmaker trade as well for decades to come. Its not justin the US's interest to keep rates low.
The US can service to the tune of 200bil. forever. The argument "the market can raise rates" just makes me shake my head " no it cant"
I still think the world has to show up at US treasury auctions and bid heavily for their own
Good. Shorting UStreasuries may join JGb's as a widowmaker trade as well for decades to come. Its not justin the US's interest to keep rates low.
The US can service to the tune of 200bil. forever. The argument "the market can raise rates" just makes me shake my head " no it cant"
Last edited:
International interest rates and national debts are just more pawns in the international game of who is top country and the subsequent pecking order. The current spat between China and the US over the artificial islands built by China in the Pacific will no doubt escalate as time progresses, to make dangerous tit for tat exchanges.
Such huge debts were incurred for next to nothing in exchange. The Trillions poured into the Middle East are showing little positive effects. The gross incompetence of the Bush regime and others beggar belief.
The millions spent on raising an allied force to fight in Syria raised not the thousands expected, but according to the General in charge a mighty force of only 4 people !!
Hopeless or what ?
Save your money and better spend it on potholes etc.
Such huge debts were incurred for next to nothing in exchange. The Trillions poured into the Middle East are showing little positive effects. The gross incompetence of the Bush regime and others beggar belief.
The millions spent on raising an allied force to fight in Syria raised not the thousands expected, but according to the General in charge a mighty force of only 4 people !!
Hopeless or what ?
Save your money and better spend it on potholes etc.
Last edited:
Seem to have left out an option there, energy. They could buy up land, buildings and other assets like private businesses. That puts a slightly different light on things doesn't it.
Given that we've untethered money from gold, all we would have to do is print up the money if they should be so impertinent as to want it back.
And the krugman acolytes would cheer and give high fives when we did just that. Not even bothering to think about the depreciating value of the dollars in their own wallets.
I remember well the decades of supporting The West against that infamous giant in the East - the USSR.
Now that there is only one super power, the US seems to have gone completely nuts. Wasting Trillions of money on phantom armies in The Middle East that disappear at the first shot etc. Their supplies costing Trillions, arming up ISL nicely at no cost to them. I mean really. Now the airheads say don't worry about the money and so no reins on the Presidents to come ! Have you all gone a bit potty or what ?
The situation in Europe with NATO creeping Eastwards is escalating the situation here. The US and China are escalating a new crisis in the Pacific.
The inevitable crunch is going to be bloody and unnecessary.
Now that there is only one super power, the US seems to have gone completely nuts. Wasting Trillions of money on phantom armies in The Middle East that disappear at the first shot etc. Their supplies costing Trillions, arming up ISL nicely at no cost to them. I mean really. Now the airheads say don't worry about the money and so no reins on the Presidents to come ! Have you all gone a bit potty or what ?
The situation in Europe with NATO creeping Eastwards is escalating the situation here. The US and China are escalating a new crisis in the Pacific.
The inevitable crunch is going to be bloody and unnecessary.
Last edited:
The nominal rates on U.S. Treasury issues are fixed. The real rates adjust to U.S. price inflation (dollar devaluation). The inevitable crunch may be 'bloody and unnecessary', but Oh So Profitable!
Good point. However, that would be a better scenario than the worst case one I mentioned since the likelihood of having to raise taxes would be less: The US sellers of the land, buildings etc would be likely to invest most of the proceeds in US bonds or other investments, whose sellers would act similarly. Some of the cash may leak into extra consumer spending, which might result in a slight tax hike being needed, but the effect would still be milder than the worst case scenario.
In any case my worst case scenario of tax hikes being needed to pay the US debt is very unlikely in general, since as long as the US maintains its AAA credit rating there will always be someone else to buy the US debt at a reasonable interest rate. The only thing that has ever threatened the US credit rating is the brinkmanship over the debt ceiling by Congress. Neither Japan or UK ever had any problems with debt rating even when their debt ratio went above 250% of GDP for long periods of time, and USA has never been much above 100% (including the Social Security special bonds).