Home › Forums › Financial Markets/Economics › U.S. TO DEFAULT ON ITS DEBT – SUMMER 2009
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October 18, 2008 at 6:02 PM #289822October 18, 2008 at 6:32 PM #289475
Arraya
Participant[quote=jficquette]You can’t default on debt when you control the value and the amount of what its denominated in.
[/quote]
How do you control value?
It’s not something we can magically create. We’ve been fooled for a long time. All the wealth that is going to evaporate for the same reason the housing bubble popped, There was never any true value, just like the dollar which is propped up by being the reserve currency. Any american holding dollar denominated assets is going to get poor very very quick. This is what revolutions are made of.
As far as amount. That is controlled by debt or printing money. What the fed is doing is injecting them with money so they can actually lend. Here’s the rub american consumers are tapped out and banks don’t want to lend. So that leaves printing. This will not go over with the world. And we ain’t calling the shots anymore. Not after Paulson and crew have sold those ponzi-scheme algorithmic debt vehicles all over the world and practically blew up all the world banks.
The big question is how much will the dollar fall when/if it loses reserve currency? I’ve read up to 90% buy some studies. Needless to say it will be significantly less.
It’s going to be a mean reversion of biblical proportion.
October 18, 2008 at 6:32 PM #289784Participant[quote=jficquette]You can’t default on debt when you control the value and the amount of what its denominated in.
[/quote]
How do you control value?
It’s not something we can magically create. We’ve been fooled for a long time. All the wealth that is going to evaporate for the same reason the housing bubble popped, There was never any true value, just like the dollar which is propped up by being the reserve currency. Any american holding dollar denominated assets is going to get poor very very quick. This is what revolutions are made of.
As far as amount. That is controlled by debt or printing money. What the fed is doing is injecting them with money so they can actually lend. Here’s the rub american consumers are tapped out and banks don’t want to lend. So that leaves printing. This will not go over with the world. And we ain’t calling the shots anymore. Not after Paulson and crew have sold those ponzi-scheme algorithmic debt vehicles all over the world and practically blew up all the world banks.
The big question is how much will the dollar fall when/if it loses reserve currency? I’ve read up to 90% buy some studies. Needless to say it will be significantly less.
It’s going to be a mean reversion of biblical proportion.
October 18, 2008 at 6:32 PM #289791Participant[quote=jficquette]You can’t default on debt when you control the value and the amount of what its denominated in.
[/quote]
How do you control value?
It’s not something we can magically create. We’ve been fooled for a long time. All the wealth that is going to evaporate for the same reason the housing bubble popped, There was never any true value, just like the dollar which is propped up by being the reserve currency. Any american holding dollar denominated assets is going to get poor very very quick. This is what revolutions are made of.
As far as amount. That is controlled by debt or printing money. What the fed is doing is injecting them with money so they can actually lend. Here’s the rub american consumers are tapped out and banks don’t want to lend. So that leaves printing. This will not go over with the world. And we ain’t calling the shots anymore. Not after Paulson and crew have sold those ponzi-scheme algorithmic debt vehicles all over the world and practically blew up all the world banks.
The big question is how much will the dollar fall when/if it loses reserve currency? I’ve read up to 90% buy some studies. Needless to say it will be significantly less.
It’s going to be a mean reversion of biblical proportion.
October 18, 2008 at 6:32 PM #289823Participant[quote=jficquette]You can’t default on debt when you control the value and the amount of what its denominated in.
[/quote]
How do you control value?
It’s not something we can magically create. We’ve been fooled for a long time. All the wealth that is going to evaporate for the same reason the housing bubble popped, There was never any true value, just like the dollar which is propped up by being the reserve currency. Any american holding dollar denominated assets is going to get poor very very quick. This is what revolutions are made of.
As far as amount. That is controlled by debt or printing money. What the fed is doing is injecting them with money so they can actually lend. Here’s the rub american consumers are tapped out and banks don’t want to lend. So that leaves printing. This will not go over with the world. And we ain’t calling the shots anymore. Not after Paulson and crew have sold those ponzi-scheme algorithmic debt vehicles all over the world and practically blew up all the world banks.
The big question is how much will the dollar fall when/if it loses reserve currency? I’ve read up to 90% buy some studies. Needless to say it will be significantly less.
It’s going to be a mean reversion of biblical proportion.
October 18, 2008 at 6:32 PM #289826Participant[quote=jficquette]You can’t default on debt when you control the value and the amount of what its denominated in.
[/quote]
How do you control value?
It’s not something we can magically create. We’ve been fooled for a long time. All the wealth that is going to evaporate for the same reason the housing bubble popped, There was never any true value, just like the dollar which is propped up by being the reserve currency. Any american holding dollar denominated assets is going to get poor very very quick. This is what revolutions are made of.
As far as amount. That is controlled by debt or printing money. What the fed is doing is injecting them with money so they can actually lend. Here’s the rub american consumers are tapped out and banks don’t want to lend. So that leaves printing. This will not go over with the world. And we ain’t calling the shots anymore. Not after Paulson and crew have sold those ponzi-scheme algorithmic debt vehicles all over the world and practically blew up all the world banks.
The big question is how much will the dollar fall when/if it loses reserve currency? I’ve read up to 90% buy some studies. Needless to say it will be significantly less.
It’s going to be a mean reversion of biblical proportion.
October 18, 2008 at 7:10 PM #289496jficquette
ParticipantYou can control the value by the interest rate you pay and manipulate the relative strength against other currencies.
If our debt was denominated in Euro’s then that would make things different.
John
October 18, 2008 at 7:10 PM #289804ParticipantYou can control the value by the interest rate you pay and manipulate the relative strength against other currencies.
If our debt was denominated in Euro’s then that would make things different.
John
October 18, 2008 at 7:10 PM #289812ParticipantYou can control the value by the interest rate you pay and manipulate the relative strength against other currencies.
If our debt was denominated in Euro’s then that would make things different.
John
October 18, 2008 at 7:10 PM #289843ParticipantYou can control the value by the interest rate you pay and manipulate the relative strength against other currencies.
If our debt was denominated in Euro’s then that would make things different.
John
October 18, 2008 at 7:10 PM #289847ParticipantYou can control the value by the interest rate you pay and manipulate the relative strength against other currencies.
If our debt was denominated in Euro’s then that would make things different.
John
October 18, 2008 at 7:19 PM #289515Participant[quote=jficquette]You can control the value by the interest rate you pay and manipulate the relative strength against other currencies.
If our debt was denominated in Euro’s then that would make things different.
John
[/quote]
To an extent. Don’t confuse interest rates with dollar valuation though. The price of money is different from the value. Though the price will affect value over time, it’s still different.
Still the problem remains we can’t print and the world wants a different reserve currency. The fed is in a box.
October 18, 2008 at 7:19 PM #289824Participant[quote=jficquette]You can control the value by the interest rate you pay and manipulate the relative strength against other currencies.
If our debt was denominated in Euro’s then that would make things different.
John
[/quote]
To an extent. Don’t confuse interest rates with dollar valuation though. The price of money is different from the value. Though the price will affect value over time, it’s still different.
Still the problem remains we can’t print and the world wants a different reserve currency. The fed is in a box.
October 18, 2008 at 7:19 PM #289831Participant[quote=jficquette]You can control the value by the interest rate you pay and manipulate the relative strength against other currencies.
If our debt was denominated in Euro’s then that would make things different.
John
[/quote]
To an extent. Don’t confuse interest rates with dollar valuation though. The price of money is different from the value. Though the price will affect value over time, it’s still different.
Still the problem remains we can’t print and the world wants a different reserve currency. The fed is in a box.
October 18, 2008 at 7:19 PM #289863Participant[quote=jficquette]You can control the value by the interest rate you pay and manipulate the relative strength against other currencies.
If our debt was denominated in Euro’s then that would make things different.
John
[/quote]
To an extent. Don’t confuse interest rates with dollar valuation though. The price of money is different from the value. Though the price will affect value over time, it’s still different.
Still the problem remains we can’t print and the world wants a different reserve currency. The fed is in a box.
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