Bloomberg stretching those brain muscles | TigerDroppings.com
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CptBengal
USA Fan
BR Baby
Member since Dec 2007
45527 posts

Bloomberg stretching those brain muscles

quote:

Furthermore, while saying the federal deficit does indeed need to be curtailed, Mr. Bloomberg argued the United States could owe “an infinite amount of money” and there is no specific amount that would cause the country to default.

“We are spending money we don’t have,” Mr. Bloomberg explained. “It’s not like your household. In your household, people are saying, ‘Oh, you can’t spend money you don’t have.’ That is true for your household because nobody is going to lend you an infinite amount of money. When it comes to the United States federal government, people do seem willing to lend us an infinite amount of money. … Our debt is so big and so many people own it that it’s preposterous to think that they would stop selling us more. It’s the old story: If you owe the bank $50,000, you got a problem. If you owe the bank $50 million, they got a problem. And that’s a problem for the lenders. They can’t stop lending us more money.”


LINK


boosiebadazz
Member since Feb 2008
49831 posts

re: Bloomberg stretching those brain muscles
so where is he wrong?


Antonio Moss
LSU Fan
Baton Rouge
Member since Mar 2006
30406 posts

re: Bloomberg stretching those brain muscles
quote:

so where is he wrong?


Assuming there is some mythical point where lenders stop caring about getting their money back.


CptBengal
USA Fan
BR Baby
Member since Dec 2007
45527 posts

re: Bloomberg stretching those brain muscles
quote:

so where is he wrong?

he makes one major assumption...that people will continue to buy our debt.

It is reasonable that since we are tied to oil...that they may no longer wish to purchase our debt if there is a change in that commodity.


PrimeTime Money
USA Fan
Houston, Texas, USA
Member since Nov 2012
12232 posts

re: Bloomberg stretching those brain muscles
Well, he's actually right.

The problem is that eventually, people will stop lending. It won't last forever.

It is just that nobody knows when the house of cards is going to fall.


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Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
121350 posts

re: Bloomberg stretching those brain muscles
Well if we default, people aren't going to keep lending us money.

And obviously it isn't infinite. It's just a big number.


GumboPot
LSU Fan
Saints Fan
Member since Mar 2009
29300 posts

re: Bloomberg stretching those brain muscles
Bloomberg actually nailed it.

Sickening isn't it?


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CarrolltonTiger
LSU Fan
New Orleans
Member since Aug 2005
46942 posts

re: Bloomberg stretching those brain muscles
quote:

so where is he wrong?


Because at some point in time your money gets devalued to pay off your foreign debt.

You aren't as special as you think you are.


Rohan2Reed
Grambling Fan
ATL, shorty.
Member since Nov 2003
74007 posts

re: Bloomberg stretching those brain muscles
quote:

he makes one major assumption...that people will continue to buy our debt.


by "people" do you mean the Fed?


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Antonio Moss
LSU Fan
Baton Rouge
Member since Mar 2006
30406 posts

re: Bloomberg stretching those brain muscles
quote:

Well if we default, people aren't going to keep lending us money.


And, what most people don't understand is that private individuals hold most of the U.S. debt. When that default occurs it's going to be worse than just a foreign entity cutting off the pipeline; it's going to cause a lot of people to lose investments.


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GumboPot
LSU Fan
Saints Fan
Member since Mar 2009
29300 posts

re: Bloomberg stretching those brain muscles
quote:

Assuming there is some mythical point where lenders stop caring about getting their money back.


Where is that point? When will the FR stop printing to buy federal debt? When will other central banks stop printing to buy federal debt?


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real
LSU Fan
Dixieland
Member since Oct 2007
13287 posts

re: Bloomberg stretching those brain muscles
Hasnt our Credit rating already falling? There is a limit, dont know it,but its there.


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PrimeTime Money
USA Fan
Houston, Texas, USA
Member since Nov 2012
12232 posts

re: Bloomberg stretching those brain muscles
That is one way of defaulting... printing money.

This is what is going to happen to the United States.

They aren't just going to straight-up default. People will keep buying our debt, and they get paid back with increasingly worthless dollars.

Inflation will run rampant and the U.S. will "default" through a devalued dollar.


real
LSU Fan
Dixieland
Member since Oct 2007
13287 posts

re: Bloomberg stretching those brain muscles
You got Prime time, at some point inflation is going thru the roof.
This post was edited on 3/1 at 12:44 pm


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boosiebadazz
Member since Feb 2008
49831 posts

re: Bloomberg stretching those brain muscles
quote:

You aren't as special as you think you are.


what?


Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
8411 posts

re: Bloomberg stretching those brain muscles
quote:

And obviously it isn't infinite. It's just a big number.

It's a very big number indeed and we're not at all close to exceeding it.

Thank god someone finally called bull shite on the country's problems being analagous to a household budget.


CarrolltonTiger
LSU Fan
New Orleans
Member since Aug 2005
46942 posts

re: Bloomberg stretching those brain muscles
quote:

what?


That people will continue to lend you money you have no future ability to pay and there will be no consequences.


boosiebadazz
Member since Feb 2008
49831 posts

re: Bloomberg stretching those brain muscles
oh, i thought you meant me personally. i was like wtf

i agree that there is a limit

i just dont think we're close to it

we're still the most stable country in the world.


real
LSU Fan
Dixieland
Member since Oct 2007
13287 posts

re: Bloomberg stretching those brain muscles
Hasnt our Credit rating already been down graded?


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ironsides
LSU Fan
Nashville, TN
Member since May 2006
7364 posts

re: Bloomberg stretching those brain muscles
No - bloomberg does have it right. What's wrong is that a man that has made his entire career in the financial media industry and computerized financial analysis tools is that doing what he is talking about has gigantic consequences.

What happens when the banks go out of business because they didn't collect the payments they thought they were getting?


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