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Given the drunken sailor spending,monetizing of debt and lack of fiscal responsibility. Will the US default?

Sovereign Debt......

(01-15-2010 09:31 AM)Salty Dog Wrote: [ -> ]Given the drunken sailor spending,monetizing of debt and lack of fiscal responsibility. Will the US default?

Sovereign Debt......

The US borrows in dollars. It won't default on its debt because they can always print more money.

Where there is a very real possibility of default is in the entitlements promised to its citizens. Social Security, Medicaid, the new healthcare plan perhaps.

(01-15-2010 11:20 AM)Byrdy Wrote: [ -> ]

(01-15-2010 09:31 AM)Salty Dog Wrote: [ -> ]Given the drunken sailor spending,monetizing of debt and lack of fiscal responsibility. Will the US default?

Sovereign Debt......

The US borrows in dollars. It won't default on its debt because they can always print more money.

Where there is a very real possibility of default is in the entitlements promised to its citizens. Social Security, Medicaid, the new healthcare plan perhaps.

You can't relentlessly print money without debasing the currency. Give me one example in history where any government has been able to print their way out of their problems.

(01-15-2010 12:46 PM)Salty Dog Wrote: [ -> ]

(01-15-2010 11:20 AM)Byrdy Wrote: [ -> ]

(01-15-2010 09:31 AM)Salty Dog Wrote: [ -> ]Given the drunken sailor spending,monetizing of debt and lack of fiscal responsibility. Will the US default?

Sovereign Debt......

The US borrows in dollars. It won't default on its debt because they can always print more money.

Where there is a very real possibility of default is in the entitlements promised to its citizens. Social Security, Medicaid, the new healthcare plan perhaps.

You can't relentlessly print money without debasing the currency. Give me one example in history where any government has been able to print their way out of their problems.

Reagan

(01-15-2010 12:46 PM)Salty Dog Wrote: [ -> ]You can't relentlessly print money without debasing the currency. Give me one example in history where any government has been able to print their way out of their problems.

I don't disagree with any of that. Your question wasn't are we potentially in for a world of hurt given all of the money we are printing. Your question was will the US default on its debt. The answer is that we won't because our debt, unlike many other nations, is denominated in our home currency. But, that doesn't mean that we won't "default" on some of our promises made to our own citizens, like Social Security.

I don't think China can repossess the USA. So... what would happen?

(01-15-2010 12:46 PM)Salty Dog Wrote: [ -> ]You can't relentlessly print money without debasing the currency. Give me one example in history where any government has been able to print their way out of their problems.

we haven't scratched the surface of the amount of dollars we can print to supply China with money. the more of our ecopnomy we transfer to them, the more dollars they use. it makes no difference if we print moeny and it goes straight to China since our jobs go with our dollars.

if we were printing money to give to Americans to spend, you might have a case, but we're printing money to send to China so it doesn't cause excess demand here nor globally, with the possible exception of oil. but we lose the GDP that China gains so I'm not sure oil will be an inflationary problem.

you want to apply rules as if our economy is still a closed domestic system but you want it to be an open global system at the same time. doesn't work. if you want an open global system you need to apply global rules. the dollar is now a global currency and China can absorb trillions withouit causing inflation in the US. it's happening right now in real time. that's why what you think you should be seeing isn't happening

no inflation with 15% unemployment and counting

(01-16-2010 11:14 AM)Supersport Wrote: [ -> ]we haven't scratched the surface of the amount of dollars we can print to supply China with money. the more of our ecopnomy we transfer to them, the more dollars they use. it makes no difference if we print moeny and it goes straight to China since our jobs go with our dollars.

if we were printing money to give to Americans to spend, you might have a case, but we're printing money to send to China so it doesn't cause excess demand here nor globally, with the possible exception of oil. but we lose the GDP that China gains so I'm not sure oil will be an inflationary problem.

you want to apply rules as if our economy is still a closed domestic system but you want it to be an open global system at the same time. doesn't work. if you want an open global system you need to apply global rules. the dollar is now a global currency and China can absorb trillions withouit causing inflation in the US. it's happening right now in real time. that's why what you think you should be seeing isn't happening

no inflation with 15% unemployment and counting

You are making the case that inflation is not going to develop in to a problem. You are not addressing the question of whether governments can print their way out of their problems.

(01-16-2010 02:18 PM)Byrdy Wrote: [ -> ]

(01-16-2010 11:14 AM)Supersport Wrote: [ -> ]we haven't scratched the surface of the amount of dollars we can print to supply China with money. the more of our ecopnomy we transfer to them, the more dollars they use. it makes no difference if we print moeny and it goes straight to China since our jobs go with our dollars.

if we were printing money to give to Americans to spend, you might have a case, but we're printing money to send to China so it doesn't cause excess demand here nor globally, with the possible exception of oil. but we lose the GDP that China gains so I'm not sure oil will be an inflationary problem.

you want to apply rules as if our economy is still a closed domestic system but you want it to be an open global system at the same time. doesn't work. if you want an open global system you need to apply global rules. the dollar is now a global currency and China can absorb trillions withouit causing inflation in the US. it's happening right now in real time. that's why what you think you should be seeing isn't happening

no inflation with 15% unemployment and counting

You are making the case that inflation is not going to develop in to a problem. You are not addressing the question of whether governments can print their way out of their problems.

I agree with you SS to an extent. We have been exporting our inflation to the Chinese(which the Austrians have been pointing out), but you are ignoring what Byrdy pointed out.

Wouldn't surprise me what the Federal "bubbament" does. Especially with a democratic congress hellbent on giving away everything folks earn in an effort to try and be the answer for everyone's problems.

Once again, if we ran our homes the way the Fed runs the "bubbament", we'd all be in jail.

(01-16-2010 04:49 PM)Salty Dog Wrote: [ -> ]

(01-16-2010 02:18 PM)Byrdy Wrote: [ -> ]

(01-16-2010 11:14 AM)Supersport Wrote: [ -> ]we haven't scratched the surface of the amount of dollars we can print to supply China with money. the more of our ecopnomy we transfer to them, the more dollars they use. it makes no difference if we print moeny and it goes straight to China since our jobs go with our dollars.

if we were printing money to give to Americans to spend, you might have a case, but we're printing money to send to China so it doesn't cause excess demand here nor globally, with the possible exception of oil. but we lose the GDP that China gains so I'm not sure oil will be an inflationary problem.

you want to apply rules as if our economy is still a closed domestic system but you want it to be an open global system at the same time. doesn't work. if you want an open global system you need to apply global rules. the dollar is now a global currency and China can absorb trillions withouit causing inflation in the US. it's happening right now in real time. that's why what you think you should be seeing isn't happening

no inflation with 15% unemployment and counting

You are making the case that inflation is not going to develop in to a problem. You are not addressing the question of whether governments can print their way out of their problems.

I agree with you SS to an extent. We have been exporting our inflation to the Chinese(which the Austrians have been pointing out), but you are ignoring what Byrdy pointed out.

I have Byrdy along with jws, but since you copied it, I'll say that if a government can print money without the risk of inflation, then it can print it's way out of a problem. the only risk of printing money is inflation, and free trade, aside form oil, wipes out so many jobs and cuts prices and asset values so much it eliminates inflation. so we'll print our way out of this and bankers will have more to steal next time around, butyou don't have to worry about inflation

but personally I think we're better off with more jobs, a little inflation andf higher interest rates as a result. much more predictable, but then the big money doesn't want predictable. I will be the first to agree that protectionism will cause some inflation, but we've had low inflation and the result is a race to the bottom. you want to work for Chinese wages?

(01-16-2010 10:42 PM)Supersport Wrote: [ -> ]I have Byrdy along with jws, but since you copied it, I'll say that if a government can print money without the risk of inflation, then it can print it's way out of a problem. the only risk of printing money is inflation, and free trade, aside form oil, wipes out so many jobs and cuts prices and asset values so much it eliminates inflation. so we'll print our way out of this and bankers will have more to steal next time around, butyou don't have to worry about inflation

SS is incorrect on on this point. Printing money can cause all sorts of trouble absent inflation. Rising real interest rates would be the thing to fear the most given our current situation. And if SS denies that we can have rising real interest rates in a non inflationary enviroment then you should ask him what he makes of what's going on in Japan right now! I'd be happy to explain it to him myself but he's afraid to talk to me.

In spite of the fact not a single country in the history of countries can be cited as succeeding in the lunacy promoted by ss in this thread, the keynesian wet dream continues. It's a living nightmare for the people having to live with the repercussions of idiotic economic policy. our university systems producing those who practice what ss preaches should have their funding pulled.

What constitutes a successful country?

(01-17-2010 03:08 PM)marsbennett Wrote: [ -> ]In spite of the fact not a single country in the history of countries can be cited as succeeding in the lunacy promoted by ss in this thread, the keynesian wet dream continues. It's a living nightmare for the people having to live with the repercussions of idiotic economic policy. our university systems producing those who practice what ss preaches should have their funding pulled.

China is succeeding wildly by doing exactly what I promote and the US is in the a severe economic slowdown second only to the Great Depression because of exactly what you promote

it couldn't be more clear that I have been right all along for several years and the likes of you and jws have been wrong. you've had exactly what you want and we're in a disaster directly because of it. you have to deny basic facts to dispute this

unless of course you like where we are which is a possibility, because anything that comes as a result of free markets and deregulation is right and good in your book

and that's before we even start to talk about the genius of saving OBL's neck from the Russians that were in the process of taking it

quite a run

^Good luck Mars.

(01-17-2010 03:55 PM)Supersport Wrote: [ -> ]

(01-17-2010 03:08 PM)marsbennett Wrote: [ -> ]In spite of the fact not a single country in the history of countries can be cited as succeeding in the lunacy promoted by ss in this thread, the keynesian wet dream continues. It's a living nightmare for the people having to live with the repercussions of idiotic economic policy. our university systems producing those who practice what ss preaches should have their funding pulled.

China is succeeding wildly by doing exactly what I promote

LOL. The Wiemar Republic did too. Bawhahahahaha

I recommend the book, "This Time Is Different" by Reinhart and Rogoff. The first three quarters of the book are historical context, so you can skip that, if you choose. Ultimately, it's a complicated and depressing read.

Not totally unrelated.....I didn't want to give it its own thread.

11 Clear Signs That The U.S. Economy Is Headed Into The Toilet

The U.S. Economy Is Headed Into The ToiletThe vast majority of the talking heads on television are still speaking of the current economic collapse as if it is a temporary "recession" that will soon be over. So far, the vast majority of the American people seem to believe this as well, although for many Americans there is a very deep gnawing in the pit of their stomachs that is telling them that there is something very, very wrong this time around. The truth is that the foundations of the U.S. economy have been destroyed by an orgy of government, corporate and individual debt that has gone on for decades. It was the greatest party in the history of the world, but now the party is over. The following are 11 signs from just this past month that show that the U.S. economy is headed into the toilet and will not be recovering....

#1) When even Wal-Mart is closing stores you know things are bad. Wal-Mart announced on Monday that it will close 10 money-losing Sam's Club stores and will cut 1,500 jobs in order to reduce costs. So if even Wal-Mart has to shut down stores, what chance do other retailers have?

#2) Americans are going broke at a staggering pace. 1.41 million Americans filed for personal bankruptcy in 2009 - a 32 percent increase over 2008.

#3) American workers are working harder than ever and yet making less. After adjusting for inflation, pay for production and non-supervisory workers (80 percent of the private workforce) is 9% lower than it was in 1973. But those Americans who do still have jobs are the fortunate ones.

#4) Unemployment is absolutely exploding all over the United States. Minority groups have been hit particularly hard. For example, unemployment on many U.S. Indian reservations is over 80 percent.

#5) Unfortunately the employment situation is showing no signs of turning around. December was actually the worst month for U.S. unemployment since the so-called "Great Recession" began.

#6) So just how bad are things when compared to past recessions? During the 2001 recession, the U.S. economy lost 2% of its jobs and it took four years to get them back. This time the U.S. economy has lost more than 5% of its jobs and there is no sign that the bleeding of jobs will stop any time soon.

#7) Can you imagine trying to get your first job in this economic climate? Our young men and women either can't get work or have given up on work altogether. The percentage of Americans 16 to 24 who have jobs is 13 percent lower than ten years ago.

#8) So where did all the jobs go? Over the past few decades we have allowed the corporate giants to ship mountains of American jobs overseas, and there are signs that this trend is only going to get worse. In fact, Princeton University economist Alan S. Blinder estimates that 22% to 29% of all current U.S. jobs will be offshorable within two decades. So get ready for even more of our jobs to be shipped off to Mexico, China and India.

#9) All of these job losses are leading to defaults on mortgages. Over the past couple of years we have seen the American Dream in reverse. According to a report that was just released, delinquent home loans at government-controlled mortgage finance giants Fannie Mae and Freddie Mac surged 20 percent from July through September.

#10) But that is nothing compared to what is coming. A massive "second wave" of mortgage defaults is getting ready to hit the U.S. economy starting in 2010. In fact, this "second wave" is so frightening that even 60 Minutes is reporting on it.

#11) Meanwhile, the Federal Reserve has announced that it made a record profit of $46.1 billion in 2009. Apparently during this economic crisis it is a very good time to be a bankster.

(01-18-2010 02:22 PM)marsbennett Wrote: [ -> ]Not totally unrelated.....I didn't want to give it its own thread.

11 Clear Signs That The U.S. Economy Is Headed Into The Toilet


#8) So where did all the jobs go? Over the past few decades we have allowed the corporate giants to ship mountains of American jobs overseas, and there are signs that this trend is only going to get worse. In fact, Princeton University economist Alan S. Blinder estimates that 22% to 29% of all current U.S. jobs will be offshorable within two decades. So get ready for even more of our jobs to be shipped off to Mexico, China and India.

#9) All of these job losses are leading to defaults on mortgages.

hell no it's not unrelated. above is exactly what I've been trying to tell you. the problem isn't an increasing money supply, it's the millions of jobs that have been sent to Chiona and the $Trillions of dollars that went with them. $700 Billion per year, $Two Billion per DAY. that's where the money went. the increased money supply is merely the a reaction to replace the hemorhage of jobs, GDP and money to China

As I have already posted before, Why Money Supply Matters.
Your only response has been to label and call it convoluted. If you can't grasp it and formulate a legitimate argument rather than the standard, "China,jobs,China,Walmart,cheap imports,blah,blah" then you have no business discussing the importance of Money Supply.
I came here with an open mind hoping to learn something, but you’re a one trick pony.
As another poster pointed out you probably have No clue what M1 is let alone its importance.

^

three questions for you:

1.) a.) why, with all this evil money supply increase, is there no inflation?

1.) b.) why is this exactly opposite of what your article insists would happen?

2.) how would an economy grow without an increase in money supply? would prices have to drop?

I understnd exactly what the article is saying, and I understand it's full of baloney, and why no recognized economist subsribes to such theory

(01-18-2010 06:01 PM)Supersport Wrote: [ -> ]^

three questions for you:

1.) a.) why, with all this evil money supply increase, is there no inflation?

1.) b.) why is this exactly opposite of what your article insists would happen?

2.) how would an economy grow without an increase in money supply? would prices have to drop?

I understnd exactly what the article is saying, and I understand it's full of baloney, and why no recognized economist subsribes to such theory

How many times do you need the exact same questions answered?

Keep listening to your government lie about inflation while lower income people suck hind tit.

Here's a youtube w/ an accompanying article link. Most of the increase in these prices took place the two summers ago, especially with food prices, during the gas price surge. Those food prices did not come down with fuel expense. Hell, even fuel is back on the rise BUT ONLY TO AMERICANS BECAUSE THE DOLLAR IS TANKING. Do you understand?

The economy grows and wealth is created in a noninflationary fashion when productivity increases and cost to produce decrease. Better production methods, better tools, techno breakthroughs etc can all happen without printing money.

All this is just the tip of the iceberg. As printed money makes it's way through the economy (gets loaned, invested, etc) our 'nonexistent' inflation will continue to worsen. The only prices that will decrease will be our housing costs and rents. An absolute nightmare. High Inflation and Horrid unemployment, courtesy of Keynes and PrezBo the spending machine.

We've been over this far too many times. I can present the info to you again, but if you can't grasp it, the entire conversation is a waste...as it apparently has been.

Just blame China and Reagan and move on.

An economy cannot grow on increased productivity alone. If an economy needs a x increase in GDP to supply x increased population, the money supply has to grow at an equivilent rate or prices will deflate, which is untenable.

I bought a 1700 SF house in Raleigh in 187 for $112,000. a comparable house today is $170,000, a 1.8% inflation rate.

I bought a basic Toyota Camrty in 1989 for $14,000. a comparable car today is $20,000, a 1.7% inflation rate.

that's two of a typical household's largest expenses. I don't see any crisis, and I challenge your pure speculation that we will see any serious inflation as long as we continue to suck 5% of GDP out of our economy and send it to China's

you posted that yourself

make up your mind on what you believe

In talking to folks, smart folks from diverse backgrounds and perspectives, I get a sense that there are essentially two trains of thought on the future of the American economy. The first group, who tend to be alarmist, believe that asset values are still too high, the consumer - the linchpin of the New Economy - is exhausted, and that government spending will achieve nothing but deficits and inflation. The second group, who are more sanguine, believe that the economy has already fundamentally recalibrated, economic activity will stay on course, and a combination of a slightly degraded dollar and increased inflation (higher than we experienced over the past decade but not out of historical proportions) will bring a new equilibrium that will be a lot like the old equilibrium.

When I analyze these competing views, I don't see a theoretical difference, merely a difference in outlook - optimistic or pessimistic. Seems to me it's just a matter of opinion, and all the treatises, explanations, and analyses are pretty much worthless. Am I missing something?