United States "dangerously close" to defaulting on its debt. Thoughts/Opinions?

Originally posted by Studenofhistory
reply to post by TiM3LoRd

 

If they can manage the money supply without runaway inflation, then so can the US Treasury.

hahaha they couldnt manage a root in a brothel. you make it sound so easy maybe they should hire you to do all their accounts. i dont think you quite understand how inflation works. once money is created it cant be destroyed unless the clock is reset. everything had to be accounted for the books need to be balanced there cant be holes in the system. every dollar is connected. think of it like quantum entanglement lol.

reply to post by TiM3LoRd


Money most certainly CAN be destroyed. It happened in the '30s. The fractional banking system means that only a small part of the money supply is represented by actual physical paper currency. The vast majority is merely an accounting entry on the bank's books. What can be created by the "stroke of the pen" can be destroyed just as easily. In the '30s, people withdrew paper currency from banks that were suspected of being insolvent. Those banks were forced to call in loans to keep their loan to reserve ratios intact. The called in loans reduced the money supply and quite often forced perfectly viable businesses into bankruptcy because they weren't able to refinance their bank debt somewhere else. The US managed quite well without a privately owned banking monopoly until 1913 when the Federal Reserve was created via some political sleight of hand.

Originally posted by religiousmurder
well the president is more than likely purposely destroying the US dollar

Exactly!

Obama is heavily invested in T bills so he can loose milions of dollars for fun!

the Obamas sure seem to be anticipating bond rates heading higher (and thus prices taking a fall). They report having between $1.1 million- $5.25 million invested in Treasury bills and another $1 million to $5 million in Treasury notes.

Read more: moneywatch.bnet.com...

moneywatch.bnet.com...

This is great!

I can't wait for all my money to be worth considerably less than it is worth today!

It seems that the usual problem that arises when ever something happens in the US, that is the people of the US think it only concerns them, or that the effects of a crisis is confined to the US, in this case it is blatantly obvious the the effects are far reaching and global.

This goes far beyond some welfare or social security cheques not getting paid, this has the potential to meltdown the world economy and when that happens world war will follow and untold misery for billions of people, it amazes me that so many Americans are so eager for it to happen, quite willing to let billions suffer so things can just be "reset" which it wont be, the US can't just wipe its debt away and start a new currency and everything will magically be "great" again, it most certainly wont be.

The US government knows it cannot keep raising its debt ceiling indefinitely, both the Reps and the Dems know this, the crux of the matter revolves around how the debt is reduced, the Dems want to tax the filthy rich and the mega corporations, the Rebs want to reduce government spending, reduce the welfare state, BOTH know the debt ceiling must be raised, but that raising the ceiling is only a temporary stop gap, at some point the interest you are paying becomes more than you receive in taxes and then you are completely bankrupt.

A default by the US will send shock waves around the globe, US debt is held in Treasuries, gold plated (well they used to be anyway) bonds, that guaranteed payment and at a fixed interest rate. This interest rate is typically very low because of the nature of Treasuries, they are very secure, extremely low risk. They are used by very large private investors and even by countries because they are so safe, and a good way to secure large surplus amounts of cash. If the US defaults on its payments to them, then the interest charged against them will increase drastically, thus putting even more pressure on the US economy, as it has to use more of its taxes to pay interest payments, causing more defaults and the interest to keep rising, the problem keeps rolling and compounding its self until collapse happens.

The US dollar will stop being the worlds reserve currency, nations will rush to dump their existing holdings in the dollar, the dollar will totally collapse and lose value, other nation states will have trillions of holdings lost and themselves start to become bankrupt, there will be food a resource shortages on a huge unprecedented scale, this will lead to larger and larger conflict as nations try to secure what they need. When the US dollar becomes worthless, then the alliances it has bought around the world will melt away, the US will become isolated as Russia and China step in to fill the void.

What the US needs to do is raise the limit now, but make serious plans to ensure it is never needed to raise the the limit again, the Reps are right that government spending needs to be cut, but it is not just the welfare and medicare (any civilized country should look after its people, especially when it taxes those people) it needs to drastically reduce its military spending, because that is what sucks up all the money, and it ALSO needs to start taxing the mega rich and greedy corporate assholes.

Then the next step would be after everything is settled is to kill the Fed and take down the stock exchange, those are the two most evil things in America today and the cause of all the financial woe, they suck the life blood out of the people and pass it on to the parasites at the top

reply to post by liejunkie01

Originally posted by liejunkie01
I think that a big "event" will happen to make the debt disappear or not matter anymore. There is no possible way to pay it all back. The only problem is, what event is big enough to make trillions and trillions of dollars not matter anymore? The national debt is the biggst lie to us americans.

By big, I'm thinking nuclear. Are you?

reply to post by ohiotim2112


We've simply got to buck up and cut social programs. We can't keep going like this. There will be a lot of people complaining about it, but if we don't trim a little now, we will have to trim a WHOLE LOT later. And that will look like the situation in Greece -not pretty.

My thought/Opinion is 'let it default'
It would just level the playing field.

Like all good films the action will go down to the last second and we need a good script else you might start to think about the phone hacking scandle or the pack of lies we are being sold on libya

I'm not a betting man but i'll bet $50 that the debt celling is resovled by the 4th and if it's not then your $50 won't do you much good anyway.

Come on who's up for it.

For the record the ball is in obams court because he threw the last deal out because the amount was too little and the time was to short so stick that in you're pipe and smoke it mr obama and the zionist bankers who control both sides anyway and thats why we have directors in films and all wait in suspense.