So what is the debt "crises" end game?

S

Saltynuts

How does it end? Does the U.S. default? Or just prints mass amounts of money, with huge inflation, to eliminate the debt without a default? Seems the latter might entail a fundamentally different market strategy than the former. Or is there some third possible realistic outcome?

Thanks!
 
Never thought of it this way.

Add on the top of that, talks about, perma ,,freeing" millenials from student debt, by writing it off & ideas about universal income.

It will get, really interesting.


There are practical solutions tho, might hurt few egos, and some might be called socialists, but if inherritage taxes would go up to 85% ~ 95%, then at least a good chunk of it, could be paid in few generations.

But.

...But do US really wants to see countries like China, getting back their +$1 T ... ?

Devil on the both sides... :rolleyes:
 
Last edited:
Saltynuts said:
How does it end? Does the U.S. default? Or just prints mass amounts of money, with huge inflation, to eliminate the debt without a default? Seems the latter might entail a fundamentally different market strategy than the former. Or is there some third possible realistic outcome?

Thanks!
More...
Most importantly it's important to realize it isn't a "crisis" in the trading timeframe. People screamed through the entire 8 years of the Obama presidency that massive inflation was imminent because of the rising debt (and those same people fell hypocritically silent as it ballooned even more over the past 3 years). If they'd but their money where their mouth was they'd have lost massive amounts of money.
It's an important subject, and probably one you should be thinking about in terms of overall wealth protection over the long term if you have wealth to protect. But it's not a short term trading opportunity, no matter how shrill the voices trying to score political points.
 
What if the central banks have actually solved the "Debt problem".

Step 1. Create unmanageable debt and pass it off to dodgy credit people
Step 2. Securitize that debt
Step 3. Dodgy credit people start defaulting. Bankruptcy laws prevent discharging all peon debt.
Step 4. Sell debt to FEd after threatening global economy
Step 5. Profit.
Step 6. Fed never takes debt off balance sheet
Step 7. Central banks own us
Step 8. We officially become serfs again!
 
nooby_mcnoob said:
What if the central banks have actually solved the "Debt problem".

Step 1. Create unmanageable debt and pass it off to dodgy credit people
Step 2. Securitize that debt
Step 3. Dodgy credit people start defaulting. Bankruptcy laws prevent discharging all peon debt.
Step 4. Sell debt to FEd after threatening global economy
Step 5. Profit.
Step 6. Fed never takes debt off balance sheet
Step 7. Central banks own us
Step 8. We officially become serfs again!
More...

this is the path of least resistance pretty much for everybody -

- certainly the CBs that won't need to deal with no more massive crisis;
- politicians will be happy to have money to spend;
- businesses will be happy with the easy money;
- younger people will have mixed feelings due to high asset prices, but at the meantime job opportunities are plenty;
- the only pissed off people are pensioners.. and a lot of unfunded liabilities can't find a way to fund.
 
What "dodgy debt" does the Fed have on it's balance sheet at the moment, exactly? As far as I know they only have U.S. Treasury debt?
 
dozu888 said:
this is the path of least resistance pretty much for everybody -

- certainly the CBs that won't need to deal with no more massive crisis;
- politicians will be happy to have money to spend;
- businesses will be happy with the easy money;
- younger people will have mixed feelings due to high asset prices, but at the meantime job opportunities are plenty;
- the only pissed off people are pensioners.. and a lot of unfunded liabilities can't find a way to fund.
More...

Right, I mean really aside from the moral hazards where a few old people who have already benefited from asset inflation will suffer, this is pretty much the template for a busy economy.

Damn...

USD is worthless.
 
You must log in or register to reply here.
Back
Top