Economics 101, thanks maat. They must think other countries are like American Credit Cards, if ya stiff 'em on the loan they just smudge your credit.
Well, economies need money flowing. Exactly why people took risks sailing the high seas to find gold or trekking across the country to California to find it. Nothing has changed. That's just how economies work. Obviously conservatives like to restrict money and force depression on others. Which is kind of demented.
We are more likely to follow Japan's doomed footsteps than Greece because we can manipulate rates lower for a long time. I believe the below video is from Hayman Capital, Kyle Bass' fund. It shows why central banks in the developed world won't allow rates to go up in a meaningful way without a fight. [video=youtube;Njp8bKpi-vg]https://www.youtube.com/watch?v=Njp8bKpi-vg[/video]
Kyle Bass was a mortgage expert. He knows nothing about monetary systems. The reason they want interest rates low has nothing to do with interest payments. Not one iota. It has 100% to do with keeping money in the economy flowing including credit.
Lmao!! Japan and the U.S. can't run out of made up money. That has literally nothing to do with why these central banks are keeping interest rates low.
It's not if I say so, it's just how our systems work. That video is embarrassing. The most important entity involved in govt debt are banks and they do not purchase govt debt like the private sector. They'll never run out of the ability to make money to buy debt. In the video it talks about investors and corporations, lol. Those are the tinyest sliver of people who purchase debt from the Treasury. If you have a video that doesn't even mention Primary Dealers or banks, you know it's elementary nonsense. You're smarter than this.
That's the most difficult thing for people to let go of when it comes to our monetary system and government. The private sector is at the very bottom of the totem pole. The government and FR do not give a flying crap whether or not the private sector buys bonds from the Treasury. They already have buyers with an infinite bankroll. And then if those infinite bankroll buyers are in trouble we have another infinite bankroll buyer ready to take over. There is literally no mathematical or logical way Japan or the U.S. would run out of money. We are not like Greece, who literally does have a mathematical way to run out of money.
Japanese pensions have a ton of this stuff, and that fact is consistent with the video. and are you thinking that banks will eventually buy this for a negative real yield? It's like you understand who the first buyer of government debt is, but your knowledge just stops there.
It doesn't matter if their pensions got it. The government does not need the money from those pensions. They don't need a single dollar from corporations or the private sector. But your knowledge stops there. Trust me you have no clue what you are talking about right now.
Trust you? Well when you're that smug how can I not? I can't wait until monetarists take over. The tax rate for everyone and everything will go to zero. banks will just buy all the government bonds and never try to sell any of them. Economic scarcity will be a thing of the past.
When you understand how it works you lose all these make believe fears. If you are believing what that video you posted says, you truly have no clue what's going on. Not going to lie. Sometimes the truth hurts but having an open mind goes a long way.
What you're describing is sustainable for decades in a very low rate environment. We all get this. The monetarists take that the extra mile and believe they found the golden goose.
It will be around for centuries. It's not as scary as you make it out to be. Pretty sound logic when you understand it.
Do you really not see the illogic in your assertion? Is it your opinion that the EU is acting irresponsibly by not funding Greece's excess?
Of course, letting one of your own countries destroy itself is not very logical. Unless the EU's goal was to destroy Greece so it leaves. Not sure the purpose of that, lol.
Exactly, there is no day of reckoning. The debt is nothing more than an asset on the balance sheet of banks of which they purchase with made up money. Now, the private sector and corporations can purchase this debt on the secondary market, but that's just an exchange of assets... none of that gives the government money to spend as the money has already been spent. There will never be a day we can't pay off maturing debt, and there will never be a day we have to pay the "banks" back to eliminate these assets off their balance sheets. The system gets less and less scary when you actually understand how it works.
The inevitable outcome of socialism/leftist policies. Greece can no longer steal from other people or from children (the basis of leftism) so they have run out of money. Greed of the left reaching new highs
Only if he has to divert attention from a disastrous Iranian nuke deal...More likely he'd bail out Puerto Rico....
His point is ridiculous....raising taxes no one pays, reducing the size of the public sector by retiring folk and making imaginary cuts to pensions does not solve the problem...Raising actual revenues and firing folk not needed does.
