Why is a US Failed Auction So Feared?

[milktruck]

It drew yawns when Romania, Hungary, Germany and China had failed auctions. I think theres another recent one Im forgetting. Greece took their ball and went home once or twice I think.

I realize the US has to roll a ton of debt, but Germany seems like a pretty heavy hitter to be having trouble unloading, and I dont remember it being that bad afterwards in terms of market reaction. And the Euro has at least another few weeks left in it. China is supposed to save the world too, but thats too much of a tangled web for me to think about for tonight.

Why is the US failed auction supposedly going to cause a black swan currency event when everything else was taken relatively in stride? Have I been fear-mongered or am I not weighing magnitudes well?

 

[misterno]

Illuminati and free masons will never let that happen

They created an illusion of american wealth and made the world believe and they will do anything to keep this alive

interest rates will never rise and us gov debt will never be an issue. USD will never lose value in drastic terms. It is all controlled by big powers

 

[Martinghoul]

Weren't people saying that about the powers that be in Europe and how the Illuminati will never let the EUR go down?

 

[peilthetraveler]

There will never be a failed US auction because the Fed will always keep buying.

 

[zdreg]

it would be useful to definie failed auction before using words like never.

 

[nazzdack]

Quote from milktruck:
Why is the US failed auction supposedly going to cause a black swan currency event when everything else was taken relatively in stride? Have I been fear-mongered or am I not weighing magnitudes well?

Yes, it's a "media" conspiracy, not a "financial" conspiracy. They need to constantly create and fabricate news in order to maintain the attention of their audience with fear.

 

[asiaprop]

you are seriously asking? Because Germany has a huge trade surplus, while in the US everything from your house, through your car, all the way down to your morning corn flakes is financed by us Europeans and Asians (I wonder why, is a AAA rating truly deserved?). There are economies who make more than they spend and at the same time now know that tightening the belt is better than keeping on printing money for future generations to bear - and then there are other countries that are great at "marketing"themselves (a.k.a. bullshitting) and making everyone else believe they are good for the credit.

Which part is so hard to understand? You dont think pulling the rug under your ass won't have a lasting impact?

Quote from milktruck:

It drew yawns when Romania, Hungary, Germany and China had failed auctions. I think theres another recent one Im forgetting. Greece took their ball and went home once or twice I think.

I realize the US has to roll a ton of debt, but Germany seems like a pretty heavy hitter to be having trouble unloading, and I dont remember it being that bad afterwards in terms of market reaction. And the Euro has at least another few weeks left in it. China is supposed to save the world too, but thats too much of a tangled web for me to think about for tonight.

Why is the US failed auction supposedly going to cause a black swan currency event when everything else was taken relatively in stride? Have I been fear-mongered or am I not weighing magnitudes well?

 

[jem]

Quote from asiaprop:

you are seriously asking? Because Germany has a huge trade surplus, while in the US everything from your house, through your car, all the way down to your morning corn flakes is financed by us Europeans and Asians (I wonder why, is a AAA rating truly deserved?). There are economies who make more than they spend and at the same time now know that tightening the belt is better than keeping on printing money for future generations to bear - and then there are other countries that are great at "marketing"themselves (a.k.a. bullshitting) and making everyone else believe they are good for the credit.

Which part is so hard to understand? You dont think pulling the rug under your ass won't have a lasting impact?

The reason the U.S. has been able to sell debt is the countries is not because we are good bullshiters... (our bankers probably are) but because the countries who exported into our markets did not want to exchange dollars for their currency. If they did the dollar would have gone lower and their currency would have gone up.
So to ease pressure on the devaluing dollar they hid their cash in US debt.
Therefoe they have been able to distort trade longer.

They now fear that if our auctions truly failed.

1. Their stockpile of dollars would become less valuable
2. their products would be more expensive in our market.
3. The value of their US bonds and notes would crater.

Finally, our opposition party... the republicans are not a big risk to nationalize our industry and tell the debt owners to jump in a lake.

 

[Misthos]

Quote from asiaprop:

you are seriously asking? Because Germany has a huge trade surplus, while in the US everything from your house, through your car, all the way down to your morning corn flakes is financed by us Europeans and Asians (I wonder why, is a AAA rating truly deserved?). There are economies who make more than they spend and at the same time now know that tightening the belt is better than keeping on printing money for future generations to bear - and then there are other countries that are great at "marketing"themselves (a.k.a. bullshitting) and making everyone else believe they are good for the credit.

Which part is so hard to understand? You dont think pulling the rug under your ass won't have a lasting impact?

There's a reason the US runs trade deficits, it has to:

http://en.wikipedia.org/wiki/Triffin_dilemma

The question is, now that the world has grown and diversified post communism, how much longer will the rest of the world want a US $ int'l paper standard? How much longer can the US $ int'l paper standard last?

 

[misterno]

Interest rates will never rise because whenever it tends to rise FED will buy the treasuries with the money they print.

As a natural outcome, inflation has to rise but it will not because %80 of USD currency is used overseas. So the more the world economy grows the more FED can print money without causing inflation.

Since the world economy is destined to grow especially Asian countries, USD will never lose value and inflation will never pick up and interest rates will never rise above %5