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wbosher
07-01-2011, 08:39 AM
Uh oh...got this from Stuff website this morning. A lot of you probably already know, but for those who dont:

http://www.stuff.co.nz/business/world/4519101/US-faces-borrowing-crisis

wbosher
07-01-2011, 09:06 AM
What was bit more interesting recently, perhaps even sinister and perhaps a prelude of things to come, was the auction of US govt bonds where there was a very poor takeup.

Isn't it true though that when the stockmarket is ticking along nicely, people tend to steer away from bonds? Couldn't that simply be the case, or is it not that simple?

Hoop
10-06-2012, 01:36 PM
News out that US debt is falling... U.S. debt load falling at fastest pace since 1950s (http://www.marketwatch.com/story/us-debt-load-falling-at-fastest-pace-since-1950s-2012-06-08)

Rex Nutting talks about personal and private debt falling.....sounds like great news ....eh? :t_up::)

Until you see the US debt clock and you notice.. yes that personal debt is definitely falling and the GNP is rising...great news!! ....but... the US national debt (15.77 Trillion) is also rising at a faster rate???.......damm :mad ;:.. thats not in the good news script.

Interesting to see from the debt clock that rising student debt has overtaken the falling credit card debt...Hmmmm

http://www.usdebtclock.org/

ananda77
11-06-2012, 04:21 PM
It's simply a misconception.that the US could ever be in a borrowing crisis - they just spend money into existence at their will - the only downside to this is inflationary pressure - not a problem at present
Kind Regards

Aaron
14-09-2012, 07:56 AM
Bernanke confuses growth with inflation. Rising stock markets and house prices aren't real growth. When the cost of living goes up as well savers and people on fixed income will suffer.
The US needs inflation to cope with the massive govt debt. Massive debt yet neither presidential candidate can discuss cutting back military spending as the paranoid population of America feel that there is a muslim or chinese invasion fleet ready to take over the US of A at the first mention of spending cuts for the military. Or maybe because manufacturing weapons is one industry the US hasn't exported to china. If I wasn't living in a country dominated by white people who speak english and have some ties to christianity America would be the scariest country on the planet.

Stranger_Danger
15-09-2012, 02:35 PM
Aaron,

America is the scariest country on the planet.

Aaron
15-09-2012, 03:33 PM
QE3 $40 billion more a month. I guess the heading on this thread is wrong. No borrowing crisis in the US the federal reserve will buy $40 billion worth of bonds every month as required. Someone in the US can borrow as much as they like for next to no cost(interest rate). I wish I had access to it. Maybe I could offer AARON bonds if Ben can't get enough.

Already 2 trillion for qe1 and qe2. Assuming USA population is 350million that is $5,700 per person(every man, woman and child in the US) before qe3 starts. qe3 is an extra $114 per person every month. Who is getting all this money and at what point do you lose faith in the strength of the US dollar. If enough people lose faith all at once then it becomes paper in your pocket and numbers on a screen but worthless. It is backed by the promise of the US govt which has run up so much debt it can't repay it unless it inflates it away by printing more money. I can't help but think that there is something unforeseen just around the corner. To me it seems ludicrous but I am not very intelligent so I must be missing something. Go Helicopter Ben.

Fudosan
15-09-2012, 10:41 PM
I just find these QE1, QE2, and finally QE3 very amusing. Isn't it wonderful that government can print away their debts? BTW, do you know who are actually holding the mortgage-back securities that Ben is going to buy?

Aaron
17-09-2012, 07:59 AM
Apparently the banks that own the fed will sell it their mortgage backed securities getting rid of more bad debt at par according to the smh this morning. The Fed will never have a cash crisis as it can print more. I have been waiting for the next big crash but inflation will keep prices up. Also what do the banks do with their new money. They are supposed to be onlending it to encourage growth but what about if they are buying other currencies such as the $NZ waiting for the $US to **** itself. They can buy up assets around the globe. What a scam. Not just NZers but people around the globe should be really hack off by the Feds actions. Time to get out of dollars and into hard assets. Damn missed the Akld property mini boom and share prices going gangbusters. What about gold Skol?

ananda77
17-09-2012, 08:29 AM
...I can't help but think that there is something unforeseen just around the corner. To me it seems ludicrous -????- so I must be missing something. Go Helicopter Ben.

...the consequences are not as unforseen as you think. At some stage in the future, the economy will collapse, as all discretionary spending in the US (and elsewhere) will be used up as interest payments, e.g.if Uncle Ben succeeds with his strategies

Kind Regards

Fudosan
17-09-2012, 08:53 AM
Apparently the banks that own the fed will sell it their mortgage backed securities getting rid of more bad debt at par according to the smh this morning. The Fed will never have a cash crisis as it can print more. I have been waiting for the next big crash but inflation will keep prices up. Also what do the banks do with their new money. They are supposed to be onlending it to encourage growth but what about if they are buying other currencies such as the $NZ waiting for the $US to **** itself. They can buy up assets around the globe. What a scam. Not just NZers but people around the globe should be really hack off by the Feds actions. Time to get out of dollars and into hard assets. Damn missed the Akld property mini boom and share prices going gangbusters. What about gold Skol?I thought US banks had sold off most mortgage backed securities to retail customers before the global financial collapse in 2008. So you are saying they are still holding a lot of sub prime mortgages-based securities.

In such environment, I doubt banks would be motivated to lend money to new businesses and create jobs. Instead, currency carry trade may be a better bet for them.

Aaron
17-09-2012, 09:43 AM
Not sub prime debt just mortgage backed securities. I guess just normal lending for US houses to kick start real estate over there.

Aaron
17-09-2012, 09:44 AM
...the consequences are not as unforseen as you think. At some stage in the future, the economy will collapse, as all discretionary spending in the US (and elsewhere) will be used up as interest payments, e.g.if Uncle Ben succeeds with his strategies

Kind Regards

I agree, but that result is not just around the corner as the US Govt can issue and sell more bonds to the fed to cover the interest indefinitely until people wake up to the fact that mad ben is destroying any value the $US might have. Also they are keeping interest rates low so everyone can manage a large amount of debt. As the debt becomes more risky at what point do people stop dealing with the US. At what point will higher interest rates be required to keep pace with the inflation ben is trying to create. It could be years away.

ananda77
17-09-2012, 10:21 AM
I agree, but that result is not just around the corner as the US Govt can issue and sell more bonds to the fed to cover the interest indefinitely until people wake up to the fact that mad ben is destroying any value the $US might have. Also they are keeping interest rates low so everyone can manage a large amount of debt. As the debt becomes more risky at what point do people stop dealing with the US. At what point will higher interest rates be required to keep pace with the inflation ben is trying to create. It could be years away.

NO NO, money ceation is not a problem in the US as long as the US economy keeps growing, something Uncle Ben wants to achieve so desperately via asset inflation. However, because money reaches the US consumer not in form of neatly stacked $-bills, but in form of debt, eventually, the economy will collapse, as all discretionary spending in the US (and elsewhere) will be used up as interest payments

Again, sovereign states printing Cash will NEVER be a problem IF the ecconomy keeps growing - and economies keep growing, when consumers keep spending

Kind Regards

ananda77
05-10-2012, 11:02 AM
...probably this will clear up some of the confusion re: USA borrowing crisis ets...

The USA has an institutional design in place in which it uses its banking system as a funding source through the requirement of Primary Dealers to bid at auction and maintain reasonable markets in government debt. This allows the government to always be able to procure funds. Additionally, even in a worst case scenario, the Fed can fund the government directly by buying debt on the primary markets. So there is no risk of insolvency in the USA. Only a risk of inflation possibly leading to hyperinflation. But this is a very different form of default than “running out of money” as many people seem to think we have….
http://pragcap.com/qa-on-qe3-part-2

Kind Regards

Hoop
06-10-2012, 10:14 AM
Election time and the media is full of BS and twisted facts...

US suffered a bad recession worst since the Great Depression. Twice as big as other recessions....so it was somewhere between a recession and depression

People only focus on one side of the economic equation the Debt side and the creation of money side.

The other other side of the equation (which most people have no idea whats happen) has shown that this 2007-2009 recession caused an evaporation of $19.2 trillion in household wealth alone...If the Treasury replenished all that lost money back into the economy all at once economic chaos would ensue so the Treasury replenishes through an managed and orderly fashion. and the FED controls the liquidity flow.
A well known saying came from the 1930's Depression that we will never have another Depression. Researchers deducted that Depressions are caused when the money supply is not replenished back into the system....that's the theory..Uncle Ben through his University Thesis is now doing his Practical Test to prove the Theory...so far so good.

References:....Go to the horses mouth...not the daily rag
http://www.treasury.gov/resource-center/data-chart-center/Pages/Financial-Crisis-Response-In-Charts.aspx

Google for Uncle Bens Thesis