US is no different than Greece

[deucy28]

Quote from clacy:
Yes, I guess you could say we're lucky that Japan is providing a test run for us. If they blow up, then we're going to feel a lot of pain too. Maybe not as much as them because our demographics are more favorable, but it won't be pretty.

Our demographics may be more favorable like the least smelly clothes in the dirty laundry hamper. Two generations behind Japan ? Depends on how fast we allow ourselves to continue to sink economically. Maybe one generation behind ? I refer to the following thread: [The U.S. being in a ] Demographic Whirlpool
http://www.elitetrader.com/vb/showthread.php?s=&threadid=255907&highlight=whirlpool

Quote from chaykapwr:

The difference between America and every other country is not that the US dollar is a reserve currency but the fact that the US has the POWER behind the dollar. I mean, if the US doesnt get what it wants when it asks nicely, it will get it by force. If any country demands payment on the bonds they hold, the US could send a couple of B-2s out, make a little show and shut everyone up.

The bully on the block gets his way, one way or another, and as long as the bully keeps everyone else from getting strong,no bigger bully will come along.

The operative words are highlighted in blue. The U.S. has the POWER to the extent it has enough dollars and the dollars have enough value, right ? After all, the big stick being used in this approach requires first a termite inspection before being raised. The beginning page of my economics book decades ago described the science of economics with the example of having to make a choice on the sprectrum between guns and butter. That choice is made by the public considering its (1) war-weary mood, and (2) and its severely slipping quality of life.
The military has something to say about it, too, TODAY: "A third of the U.S. Air Force's active-duty force of combat planes including fighters and bombers will be grounded due to federal budget cuts, and only the units preparing to deploy to major operations, such as the war in Afghanistan, will remain mission-ready, a top general said Tuesday."

and, continuing....

"The current situation means we're accepting the risk that combat airpower may not be ready to respond immediately to new contingencies as they occur," [General] Hostage said in a statement.
http://www.csmonitor.com/USA/Latest...s-will-ground-fighter-jets-Pentagon-announces

Aircraft carriers disruppted by fiscal constraints:
http://news.usni.org/2013/02/08/navy-lincoln-refueling-delayed-will-hurt-carrier-readiness

Vulnerable carriers. Billy Mitchel rides again.:
http://www.dailykos.com/story/2013/02/19/1188324/-Do-we-really-need-10-obsolete-aircraft-carriers

Quote from achilles28:

The Soviets, despite their vastly inferior technology, lost the cold war because economically, they couldn't keep up.

See the title of this thread? US is about 3 years from Greece. The US is going broke. [and] Fought too many wars, were overly indebted, and crumbled. Sound familiar?

Quote from chaykapwr:

And the Chinese are sophisticated? With their 60 year old battle ship from the USSR? They use technology that is outdated.

Isn't it a matter of time how frequently we let our corporations sell technology to the other side AND how quickly we let our ("area 51") technology be compromised AND how fast we let it get stolen ?
... Nifty swifty:
http://beforeitsnews.com/china/2013...-american-labor-for-financing-it-2445430.html

Quote from chaykapwr:

That war was pointless, and the government knew it. Those 7000 lives that were lost didnt mean anything to the government, .....

Of all the non sequiturs I have seen, this certainly is one. Literary and Reality. Lots of room for redeeming explanation.

Quote from chaykapwr:

The only thing that will bring down America is it itself. the fall must happen from within. it wont be the debt or wars it will be the people of America who make it crumble. Simple as that.

Say it isn't true ! You are not suggesting the people put into the most powerful office in the world a junior who had no qualifications ? Or his appointed juniorettes had no qualifications or agendas to serve America's interest ? Nor are you suggesting people elect representatives who put self aggrandizement and agenda for re-election before America ? Why, the next thing I will see you write is that the people have corrupted qualities: quality of education is corrupt;corrupted quality in its understanding of economics; quality of knowledge or desire for knowledge of relevant current events is corrupt; quality of knowledge of American history is corrupt; and possibly corrupted quality in understanding of political spectrum anywhere from far left to far right. You are not suggesting....!

 

[Martinghoul]

Quote from achilles28:
haha.

What do you think of Kyle Bass, pushing his JGB short trade?

Roubini, on the difference between net creditor and net debtor nations, in regards to sovereign debt sustainability?

If Kyle Bass's trade is short JGBs, it's a silly one, IMHO. You really don't wanna be short an asset where you can get your balls squeezed before you get paid. And the BoJ can easily do that if and when it wants to. Moreover, you have to pay for the privilege of being short, which, with an uncertain timeline, is unpleasant. In fact, I imagine that this is the reason Kyle Bass's "Japan-o-geddon" fund has done so poorly, as he's been expecting JGB yields to go up since 2009. As I said, I believe the eventual resolution is similar to what Korekiyo Takahashi did in the 30s, namely, the BoJ will buy all the bonds and burn them. The trade, therefore, is to be short yen, rather than JGBs. I am short (yen, that is) and I like it.

I am not a fan of Roubini. IMHO, he generally doesn't have a lot of insight to offer. The idea that factors like current account deficit/surplus and how much govt debt is held externally matter is hardly original.

The point I was trying to make is simply that you can't compare a sovereign currency issuer like the US to the European countries, who are not sovereigns. A sovereign like the US doesn't need foreign assets, as it can create theoretically unlimited quantities of its ccy.

 

[Rabbitone]

America is not headed the way of Greece and Argentina. It will find its own cliff to fall over…

The New Yorker did a great article on Greece in 2011 describing Greece as having a national pastime of Tax evasion.

http://www.newyorker.com/talk/financial/2011/07/11/110711ta_talk_surowiecki

Factors like this are the main reason the tiny country of Greece cannot maintain its debt or its form of government without life support from the ECB and IMF. But let us focus more on America (please no more ‘nam I saw enough bullets there). No America will cave from within not from without. Here is what I believe will happen.

America’s crisis is not just debt but big government. The objective thus far is big government will use any and all monetary resources like taxation or debt and legal directives (laws, executive orders, agency regulation) to gain total control of the U.S. society and U.S. business. This means big government is now trying to take over all facets of society and business using any method at its disposal. As a result the programs and regulations aimed at us are for total control of the fabric of society and business. These programs are pushing all monetary resources available towards the government and are pushing their limits.

In creating this current vast big government politicians of both parties are guilty. The majority worship at the altar of big government. These politicians all believe they can keep big government afloat on their watch while partaking of the feast at tax payer’s expense.

The fall of America in the future will come when a combination of many payments for different programs will come due all once and we will not be able to pay for all of them. It could be a combination like rising interest rates on treasuries, a bankrupt Social Security and Medicare, cost over runs on Obamacare, a new crisis in Europe collapsing the bond markets… But what I believe will drive this future collapse is the perception that the U.S. government can no longer tax or regulate its way out of that crisis. In fact it may take more than one crisis to finally put us in a real bankruptcy so we can finally fall over the cliff.

What worries me more in the interim is the lengths our government will continue to go to finance this unwieldy big government juggernaut. I believe the hand writing on the wall for more taxes and regulations for individuals and businesses that will produce the spiral that could lead to a “bankruptcy”. What bothers me most is there are just too many politician traitors (all parties concerned) in our government today willing to desert the sinking U.S. ship with their spoils while government flounders …

 

[achilles28]

Quote from Martinghoul:

Takahashi did in the 30s, namely, the BoJ will buy all the bonds and burn them. The trade, therefore, is to be short yen, rather than JGBs. I am short (yen, that is) and I like it...


The point I was trying to make is simply that you can't compare a sovereign currency issuer like the US to the European countries, who are not sovereigns. A sovereign like the US doesn't need foreign assets, as it can create theoretically unlimited quantities of its ccy.

Right. So that goes back to Takahashis print and burn trade. Short USD. Except the USD has farther to fall, because of reserve status .. etc.

 

[Martinghoul]

Quote from achilles28:
Right. So that goes back to Takahashis print and burn trade. Short USD. Except the USD has farther to fall, because of reserve status .. etc.

Well, yes, could be... But short USD vs what? I am a big fan of Ghana Cedi, myself.

 

[deucy28]

Quote from Rabbitone:


America’s crisis is not just debt but big government. The objective thus far is big government will use any and all monetary resources like taxation or debt and legal directives (laws, executive orders, agency regulation) to gain total control of the U.S. society and U.S. business. This means big government is now trying to take over all facets of society and business using any method at its disposal. As a result the programs and regulations aimed at us are for total control of the fabric of society and business. These programs are pushing all monetary resources available towards the government and are pushing their limits.

You give leadership too much credit. If it wanted to take over the means of production and control all aspects of the private sector, it would have to have better brains to conspire and execute that than what I see demonstrated in the executive and legislative branch. No, I see only an avaricious greed for more money to fund more big government. So even if you are right that the motivation is there to control everything, we are secure in the understanding that it doesn't have the IQ to do it. And its lack of success on the way of total control of the private sector becomes so messy and upsetting for citizens in sufficiently large numbers to prevent it from completley happening. I can see socialism everywhere, but I can't (yet) see motivation for total lack of liberty from either the elected or the electorate. Furthermore, I frankly don't see how our system (structure of government, voter's determining leadership's composition) could get to communism or fascism no matter how insidious it attempts to creep in, no matter how corrupt the executive or legislative branch is now.

I give great credit to efforts successfully enslaving citizens and nourishing dependency, fostering the unwashed with the notion that it is "entitled." If the GRAND PLAN on the road for government to control production is this intermediary step of socialism that includes a moribund economy (the messiness) and more dependency and continued controlling influence of the media, and educating public school kids to be liberal and continue to similarly culture them in universities, it is working successfully. But even the description of citizens as I describe it in the last paragraph of my last post won't allow for total lack of liberty to happen on our way to total melt down. We have already seen on-going and continued multiple backlashes of over reaching government on state level, not to mention the current focus on federal. But yes, the march to socialism keeps the economy on its knees and citizen enslavement sucking government tit. In theory and practice (Cuba), communism can result with a dedicated core of armed dictators/demagogues, and the right mix of some private sector leaders and intelligencia can get us to fascism that arise out of the ashes of a completely failed nation.

The longer our quality of life remains diminished and continues to diminish, the greater the success from those who wish to be controllers over the continually dumbed down in its acceptance as normal a diminished quality of life. Continued promises and demagoguery by the controllers in the powerful public sector who target the unwashed/unknowing voters works all that much better for the controllers. Big promises, big government is its own evolutionary Darwinism.

 

[achilles28]

Quote from Martinghoul:

Well, yes, could be... But short USD vs what? I am a big fan of Ghana Cedi, myself.

Commodities. Land. Productive assets.

 

[MKTrader]

Quote from clacy:

Yes, I guess you could say we're lucky that Japan is providing a test run for us. If they blow up, then we're going to feel a lot of pain too. Maybe not as much as them because our demographics are more favorable, but it won't be pretty.

If they're still muddling along 5 years from now, then all of the inflationists got it wrong and Krugman was right.

We will be truly living in bizaro world if Krugman turns out to be correct after all

Absolutely wrong re: Krugman. He should have been totally discredited back in the early 2000s. Back then he wanted to have a housing bubble. Only certain "inflationists" try to time events, anyway. The smarter ones don't, and other mortal enemies of Krugman think we may have deflation or bouts of deflation and inflation.

 

[Martinghoul]

Quote from achilles28:
Commodities. Land. Productive assets.

Sure, I can see that... Problem is that these productive assets are gonna be producing USD, aren't they? There's no escaping USD, I'm afraid...

 

[zdreg]

Quote from Martinghoul:

Sure, I can see that... Problem is that these productive assets are gonna be producing USD, aren't they? There's no escaping USD, I'm afraid...

the USD received are immediately dumped for productive assets.