Message for NJPSU. Stop gloating about your portfolio gains. It only sets you up for a steeper fall.
As you know the government officially defaults when it can no longer service its debt (i.e., pay the interest on borrowing). Forget about us ever reducing the fiscal deficit. So default is triggered when investors other than the Treasury stop buying bonds at prevailing interest rates. When foreign and private investors demand a higher ROI and get it elsewhere. Once investors find an alternative to US Treasuries it's lights out! Life's greatest mystery is who will that be. China? That's like getting into bed with the syndicate. Once in you never get out. Suffice it to say we are still the cleanest shirt in a dirty load of laundry. I believe Jim Cramer said it during the mortgage crisis.
I disagree. Perhaps not raising income taxes so much as finding alternative sources, such as taxing Net Worth. I know, it requires an overhaul of the IRS. But for real estate investors the value of their holdings is readily available at the local taxing authority, so the feds taxing real estate is low-hanging fruit. Lookout those of you who live in SALT states. I can't fathom how the feds can avoid raising taxes on capital gains despite the intensive lobbying efforts against it. Congress is facing the River Rubicon on that one.
I agree. And our indoctrination err, education system only exacerbates the situation by churning out product that knows only CRT. China is perfectly content with it. The flag of the PRC will be the first on Mars.
It's a fallacy, is it not. Admittedly, I'm long-in-the-tooth and an accountant by trade but from what I remember from my econ classes is you can have one or the other.
I'm not sure our productivity was maxed out under Trump. Please explain.
Nope. Everybody's going to pay. It's just that some have further to fall than others. The majority of Americans are already there. Washington, Wall Street and Silicon Valley just doesn't acknowledge them. How do you suppose a populist president, who's not exactly the most effervescent person in the world, got elected in 2016. That's a rhetorical question.
At least you acknowledge the hospitality and leisure industry is overleveraged. Newsflash: it's big enough to bring down the economy because we don't make anything anymore. So I'd watch the transitory part.
Not hardly. The boomers are going to blowout their kids' inheritance. They're going to party like it's 1999!
You've got to be $hitting me! Are you on mushrooms or something.
You've got to watch that Cosmos, fella. He might be up to something.
Funny thing about your stock portfolio. It's denominated in dollars. You just have further to fall. Get a parachute.
I agree wholeheartedly. Live life to its fullest because the train we're riding is going to derail.
For the life of me I don't know why that's an embarrassment. I "clip" coupons all the time. Even as a young man in my prime earning years. Perhaps it's the Scot in me coming out, I dunno. And who doesn't like bragging about getting a deal. Anyone who doesn't is being disingenuous.
Yep. It would be political suicide. Even though the Chairman of the Federal Reserve is supposed to be apolitical.
China has to step into Afghanistan. Read: the Uyghurs. It's not like they have a choice. But I agree with your sentiments on the supply chain.
And that warfare will begin when our consumer can no longer afford to buy their product. Then there will be a fire sale of US Treasuries as they dump them. Yes, we can forget about infrastructure. I envision the Balkans. We'll be organized into tribes, occupying regions and fighting for what natural resources are left. The Great Lakes will have the upper hand due to the fresh water supply. Much of the southwest will be in deep kimchee. Anyway, I plan on becoming a highwayman. I've been a prepper for years now so I'm better prepared than most.
How's that going to work when children are already living with their parents. But to your point, there's going to be an abrupt reset to out standard of living. NJ and Paoli will hardly be at piece as they rush to mitigate the hemorrhaging. So long as they're denominated in dollars it is so.
Exactly! It's all about debt-servicing. At the first inkling the Fed can't tame rates it's over with.
Really? I thought the Chairman of the Federal Reserve answers to bankers. Now I remember Hank"Crash" Paulson on his knees before Pelosi but he was Treasury Secretary not Fed Chair.
It's at WWII levels and we got it back under control. How. By becoming the world's factory. We converted from making tanks and planes to consumer product for export. Back then you didn't need a college degree to work the assembly line; in fact, most assembly line workers made more than teachers. Also back then we had education standards. No coincidence that it began to change starting October 19, 1979.
Why would you cutoff your nose to spite your face. Oh, that's right. Because of TDS!
Yep. Young people have pretty much given up on ever accumulating the wealth that boomers have. Just like they don't think Social Security will be there for them. So why not live in the moment. Moreover, they don't seek monetary reward. They seek fulfillment. It's a different mindset.
I could not agree more with you, NJ. Only what we're heading towards is not a little haircut. We can agree an economic reset is long overdue. The longer it's delayed the more severe it will be.
I don't know about that. I do the shopping for my family. While I see higher prices across-the-board I don't see empty shelves, like we had n the winter of 2020. Even lumber has normalized relatively speaking. Chips are still a problem. So what supply chains beside labor?
As you know the government officially defaults when it can no longer service its debt (i.e., pay the interest on borrowing).
The US federal government can always pay it's dollar denominated debts. It can never be forced into default.
Forget about us ever reducing the fiscal deficit.
The US federal government could pay off all the outstanding treasuries tomorrow if it wanted to. It would simply replace treasury credits with dollar credits. It makes no difference to the US federal government if the private sector holds treasuries or dollars.
Dollars are simply tax credits created by the federal government. These are created at will by the federal government.
Treasuries are simply savings devices for people that hold dollars. If provides a risk free method of earning some interest on your dollar savings. Of course the interest and principle is only redeemable in dollars which are simply tax credits created at will by the federal government.
So default is triggered when investors other than the Treasury stop buying bonds at prevailing interest rates.
Wrong. The federal government can never be forced into default.
When foreign and private investors demand a higher ROI and get it elsewhere.
Once investors find an alternative to US Treasuries it's lights out!
You don't really understand how all of this works. The federal government only issues treasuries after it has created dollars and spent them. Their is no other risk free alternative if you want to save dollars.
If you have a pile of dollars you don't want to spend you can invest in risk free treasuries and earn some interest or you can keep the dollars and earn no interest. It makes no difference to the federal government what you choose.
Life's greatest mystery is who will that be. China? That's like getting into bed with the syndicate. Once in you never get out. Suffice it to say we are still the cleanest shirt in a dirty load of laundry. I believe Jim Cramer said it during the mortgage crisis.
I can see why this is a mystery to you. I'm guessing it will continue to mystify you for rest of your life.