USA Debt Repayable

[crumbcake]

But if China's "very slowly and quietly" shifting US debt, why should US care, unless you're implying that US should improve its credit rating so it could borrow more?

Because the cat would get out of the bag. Once it is a known fact ( and it would be eventually) the Dollar would be toast.

Let me try another angle, maybe this sounds more convincing:

The cat is already out of the bag. 
This particular cat was never *in* the bag. 
Are you privy to insider knowledge inaccessible to every economist in every land in the world?  Or have you discovered a way to restructure data in a way that, once revealed, will lead one and all to your inevitable conclusion, with the certainty & elegance of a mathematical proof? 
no.
The cat is not in the bag, no one ever felt the need to stuff him in the bag much less keep him there.  It's one of the few cats who have never seen the inside of a bag, but otherwise a damn fine feline -- a yard cat who scraps with other cats when he's not sunning his ass with them.  On the stoop, for everyone to see.
[/torturing the cat metaphor]
[/fragments]
Everyone who cares knows, and things are exactly ... as they are now. 
There's nothing to see here.

[1713921830]

1713921830

[1713921830]

1713921830

[farfiman]

But if China's "very slowly and quietly" shifting US debt, why should US care, unless you're implying that US should improve its credit rating so it could borrow more?

Because the cat would get out of the bag. Once it is a known fact ( and it would be eventually) the Dollar would be toast.

How come?  US bonds are among the safest place to put a few trillion.  If China doesn't take them, someone else will because there are very few places where you can put a trillion dollars and count on getting it back.

If today china just hints that it will stop buying US T-bills( not even sell what they have) then the dollar is toast.
Why would anyone else buy it if the biggest debtor (not sure maybe it's japan today) wants out?

This whole discussion revolves on the fact that that US bonds are still considered safe but might not be in the future for reasons that were stated somewhere  up the thread. Although its a far comparison - bitcoins price is determined also buy how safe one perceives it is. Hints of a crackdown on bitcoin would make the price drop. When pirateat40 started to show 1st signs of his default his debt was sold at anything from 50% ( to believers ) and eventually down to 1 percent and less towards the end . US isnt  pirateat40 but the basic principle is the same.

One of the main reasons US bonds are still considered a safe haven is because of the situation in the EU and Japan. Basically everything is bad. Best of the bad situation.  Probably also one of the reasons China and others are buying large amounts of gold and other tangible assets.

[crumbcake]

If today china just hints that it will stop buying US T-bills( not even sell what they have) then the dollar is toast.

To paraphrase Voltaire, "compared to what?"

[farfiman]

But if China's "very slowly and quietly" shifting US debt, why should US care, unless you're implying that US should improve its credit rating so it could borrow more?

Because the cat would get out of the bag. Once it is a known fact ( and it would be eventually) the Dollar would be toast.

Let me try another angle, maybe this sounds more convincing:

The cat is already out of the bag. 
This particular cat was never *in* the bag. 
Are you privy to insider knowledge inaccessible to every economist in every land in the world?  Or have you discovered a way to restructure data in a way that, once revealed, will lead one and all to your inevitable conclusion, with the certainty & elegance of a mathematical proof? 
no.
The cat is not in the bag, no one ever felt the need to stuff him in the bag much less keep him there.  It's one of the few cats who have never seen the inside of a bag, but otherwise a damn fine feline -- a yard cat who scraps with other cats when he's not sunning his ass with them.  On the stoop, for everyone to see.
[/torturing the cat metaphor]
[/fragments]
Everyone who cares knows, and things are exactly ... as they are now. 
There's nothing to see here.

I wish I could have your "everything's OK " attitude towards this situation.  I can't say I am privy to information that isn't accessible to you or anyone that wants to look and learn. I admit I tend to go to the less mainstream channels for information and they are - to say the least- a bit extreme. I don't believe everything they say but try to cross sources and get to my own conclusions.  Of course I may be wrong  but if we are both here in a  few years I might just put in an "I told you so"- or you might do just the same.

[farfiman]

If today china just hints that it will stop buying US T-bills( not even sell what they have) then the dollar is toast.

To paraphrase Voltaire, "compared to what?"

Hmmm good question. I think If and when the chinese ( or others) will dump the dollar it will be after they make sure that they have an alternative. There are different possibilities . Some fiat currencies will be backed by "stuff" ( gold..) more than others.

[crumbcake]

I wish I could have your "everything's OK " attitude towards this situation.  I can't say I am privy to information that isn't accessible to you or anyone that wants to look and learn. I admit I tend to go to the less mainstream channels for information and they are - to say the least- a bit extreme. I don't believe everything they say but try to cross sources and get to my own conclusions.  Of course I may be wrong  but if we are both here in a  few years I might just put in an "I told you so"- or you might do just the same.

No, no, what you take for "everything's OK " attitude is just latent East European gallows humor not coming across

[farfiman]

I wish I could have your "everything's OK " attitude towards this situation.  

No, no, what you take for "everything's OK " attitude is just latent East European gallows humor not coming across

Had to look that up..  


“So this is it," said Arthur, "We are going to die."
"Yes," said Ford, "except... no! Wait a minute!" He suddenly lunged across the chamber at something behind Arthur's line of vision.
 "What's this switch?" he cried.
"What? Where?" cried Arthur, twisting round.
"No, I was only fooling," said Ford, "we are going to die after all.”

― Douglas Adams, The Hitchhiker's Guide to the Galaxy

[crumbcake]

I wish I could have your "everything's OK " attitude towards this situation.  

No, no, what you take for "everything's OK " attitude is just latent East European gallows humor not coming across

Had to look that up..  


“So this is it," said Arthur, "We are going to die."
"Yes," said Ford, "except... no! Wait a minute!" He suddenly lunged across the chamber at something behind Arthur's line of vision.
 "What's this switch?" he cried.
"What? Where?" cried Arthur, twisting round.
"No, I was only fooling," said Ford, "we are going to die after all.”

― Douglas Adams, The Hitchhiker's Guide to the Galaxy

Yep.  Still have a hardcover & a paperback of that book kicking around, and it's still hilarious. 

[sangaman]

At some point in time somebody ( doesnt have to be china) will be willing to admit that repayment is impossible and will do it anyway to try to get back something.

This is wrong. The US Govt can't default on USD the same way Blizzard can't default on WoW gold.

I ran the numbers for America a while ago.

If America gave it's ENTIRE GDP - not taxes GDP - it would take > 16 months to pay off.

That's every person, business and corporation giving 100% of its earnings to pay off debt. That's also assuming government does not increase it's spending. That would do nothing to curb current spending either. That's why spending cuts are required. However, government never rescinds power so.....

There's a problem with this line of thinking. GDP is the total goods and services produced by a nation. It's measured in USD but it's not like any USD are actually being created. It's a measure of real goods - production of things that people want and need. Treasury bonds, on the other hand, are strictly nominal and consist of only dollars. The only debt that is owed is dollars, but the country produces goods and services. Most of the debt is owned domestically anyway.

Cutting spending when a large portion of the willing workforce is sitting at home unemployed makes no sense. If anything we should be cutting taxes.

[crumbcake]

Cutting spending when a large portion of the willing workforce is sitting at home unemployed makes no sense. If anything we should be cutting taxes.

But Bullwinkle, that trick NEVER works!
http://www.cashandjoy.com/wp-content/uploads/2012/08/Bullwinkle.bmp

[Hawker]

If today china just hints that it will stop buying US T-bills( not even sell what they have) then the dollar is toast.

To paraphrase Voltaire, "compared to what?"

Hmmm good question. I think If and when the chinese ( or others) will dump the dollar it will be after they make sure that they have an alternative. There are different possibilities . Some fiat currencies will be backed by "stuff" ( gold..) more than others.

I don't believe that will ever happen.  Every government will always want to retain the capacity to print money.  I'd like to think that Bitcoin will be an alternative one day.  But that puts us in a terrible perspective.  We fuss over $265 per Bitcoin when if the Chinese were to invest a trillion, it would push the value into the $10s of 1000s each.

[farfiman]

If today china just hints that it will stop buying US T-bills( not even sell what they have) then the dollar is toast.

To paraphrase Voltaire, "compared to what?"

Hmmm good question. I think If and when the Chinese ( or others) will dump the dollar it will be after they make sure that they have an alternative. There are different possibilities . Some fiat currencies will be backed by "stuff" ( gold..) more than others.

I don't believe that will ever happen.  Every government will always want to retain the capacity to print money.  I'd like to think that Bitcoin will be an alternative one day.  But that puts us in a terrible perspective.  We fuss over $265 per Bitcoin when if the Chinese were to invest a trillion, it would push the value into the $10s of 1000s each.

Of course they will want to but in the long term it isn't viable because it is abused. Eventually it collapses and after a period of time it starts over. I don't' think Bitcoin could become THE currency but it could be a one of the ones used. A value of 10,000 and up each works for me

[Stampbit]

USA debt is measured in nuclear warheads.

[farfiman]

USA debt is measured in nuclear warheads.

A bit extreme but not that far from the truth.

[mvrak]

The US debt is clearly repayable with ChinaCoin.

[xavier]

Btw, sorry to bump up old post, but anyone thinking about US deficit should check out this article by Warren Buffet from Fortune in 2003

http://www.berkshirehathaway.com/letters/growing.pdf

It's for sure an old article but still relevant to the current situation. The pundits who keep talking about a 'recovery' are incredibly irritating. The reality is, there is no recovery - just a slow and painful repayment of the extra hours the US has been 'borrowing' from China since the 1990's. (read the article to get what I'm talking about!)

It seems that we are in for a continuation of this. I can't make sense of the macro stuff, but looking at the US debt clock - http://www.usdebtclock.org/ - , my intuition says we are in for a long, slow, painful grind. Maybe no economic collapse then. But that doesn't rule out investment bubbles generated by central bank money printing. (*cough* stock market *cough*)

As for a US dollar collapse??? I see it only happening if China sells its USD holdings. This scenario is not likely at all. So, no USD collapse.

Also , please can they stop calling it 'stimulus', 'easing', etc. These terms used by central bankers are really just trying to cover up the US inflating away its debt. I guess they are trying to avoid being more honest to keep the peace with the country's main creditors.

EDIT

I just was reading some other posts here, I thought I'd add a small rant about Bitcoin and how it could evolve. - just for fun!

As someone earlier mentioned, the level of integrity amongst politicians, bankers is just incredibly low right now. I don't know if this will have any immediate consequences, but I see in the future society will continue to evolve (ignoring any wars or conflicts *).. will continue to evolve so that we are each more independent of centralized control structures - corporates and politicians. The internet has been the most recent iteration of this, a technology that removes power from corporates and gives it to the individual - in this case the power for easy access to information principally, but many other powers besides. Bitcoin is the latest iteration of the internet , but is even more disruptive than the internet itself. In the future - ignoring any wars as stated - , human nature (greed, corruption, dishonest) will not change, but those in power will have less influence on the individual, so such weaknesses amongst our politicians will have less effect on the average citizen. Bitcoin is removing the power of control over us from central bankers. The financial crisis / events of the last 5 years have shown politicians and central bankers so be utterly incapable of managing the economy. It is therefore fitting that Bitcoin should come about at this time to relieve them of repeating the same mistakes that have caused this crisis. Bitcoin is the internet's replacement to the fed. I have no doubt that this technology will one day replace all currencies. With the world using bitcoin (or some more technologically advanced replacement), hopefully this financial crisis and the devastation caused by it may no longer feature in human history.

* Note: Wars are truly the worst events that can happen - I truly hope that any world wars do not occur in our lifetimes - if this could be true, then we would have a lot to be thankful for - really, I can imagine that all of our day to day worries would fade into insignificance if WW3 was to start - let's hope that is a place where the world *never* goes in our lifetimes or after

[farfiman]

It's for sure an old article but still relevant to the current situation. The pundits who keep talking about a 'recovery' are incredibly irritating. The reality is, there is no recovery - just a slow and painful repayment of the extra hours the US has been 'borrowing' from China since the 1990's. (read the article to get what I'm talking about!)

It seems that we are in for a continuation of this. I can't make sense of the macro stuff, but looking at the US debt clock - http://www.usdebtclock.org/ - , my intuition says we are in for a long, slow, painful grind. Maybe no economic collapse then. But that doesn't rule out investment bubbles generated by central bank money printing. (*cough* stock market *cough*)

As for a US dollar collapse??? I see it only happening if China sells its USD holdings. This scenario is not likely at all. So, no USD collapse.

The only way to do this is if there is growth- somewhere to pay it back from. This growth is not happening  and the exact opposite is true. The debts are getting bigger because no politician  was willing to do what needed to be done( it's too late now). All they can do is delay the collapse by more debt.

[Schrankwand]

As for a US dollar collapse??? I see it only happening if China sells its USD holdings. This scenario is not likely at all. So, no USD collapse

That is what they are doing. Very slowly. For more than a few years already...

[ibminer]

--snip--
As for a US dollar collapse??? I see it only happening if China sells its USD holdings. This scenario is not likely at all. So, no USD collapse.
--snip--

Unlikely scenarios seem to be happening more and more these days.

[crumbcake]

--snip--
As for a US dollar collapse??? I see it only happening if China sells its USD holdings. This scenario is not likely at all. So, no USD collapse.
--snip--

Unlikely scenarios seem to be happening more and more these days.

Foul whisp'rings are abroad. Unnatural deeds
Do breed unnatural troubles. Infected minds
To their deaf pillows will discharge their secrets.