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re: Our federal debt.
Posted on 5/19/25 at 3:02 pm to BuckI
Posted on 5/19/25 at 3:02 pm to BuckI
Does anyone have any idea what happens to the stock market if we default? I assume very few "good" things would come from that but I don't know how it directly effects the market. Also what happens to bond holders? they are just left holding a worthless IOU? Related to this I just found out that my bond holdings (inherited) are all corporate AAA after discussing the fear of default with my FA. didn't even realize that was a thing but certainly makes sense.
1
Posted on 5/19/25 at 3:07 pm to BuckI
One has to cut the deficit massively. Then keep the deficit small and through a growing economy you can grow yourself out of the debt in sixty years.
Posted on 5/19/25 at 3:14 pm to BuckI
Buy bitcoin while the dollar is worth anything.
Posted on 5/19/25 at 3:20 pm to BuckI
The current FederalReserve/Global Banking Cabal fiat monetary scam should've shite canned after the Financial Meltdown of 2008/2009.
What's known as the Fed funds rate should be set at 4.5%, and left there until Congress proves they can be responsible with the US taxpayer dollars. You will know Congress is serious about the US Debt Spiral when Congress passes a balanced budget amendment, until then......
NO MORE CHEAP FRICKING MONEY FOR THE WELL CONNECTED!!!!
Cheap money invites reckless fiscal behavior, in the government, in corporate America and in the private sector.
What's known as the Fed funds rate should be set at 4.5%, and left there until Congress proves they can be responsible with the US taxpayer dollars. You will know Congress is serious about the US Debt Spiral when Congress passes a balanced budget amendment, until then......
NO MORE CHEAP FRICKING MONEY FOR THE WELL CONNECTED!!!!
Cheap money invites reckless fiscal behavior, in the government, in corporate America and in the private sector.
Posted on 5/19/25 at 3:37 pm to Bard
quote:
Sort of. Current federal debt is just a smidge under $37T. The largest single owner is the federal government itself through intragovernmental holdings at ~21%. This breaks down to trust for Social Security, Medicare, military retirement, Medicare federal employee retirement funds, highway trust funds, etc.
The next category is the generalized "domestic holders" (ie: non-federal holders) and that breaks down into a LOT of unrelated sub-categories (which is why I didn't count it as being #1). It not only includes the Fed, but pensions, state/local governments, insurance companies, investors, etc. This accounts for ~55% of the debt ownership.
So if you are including the federal government itself in "domestic holders" then it's closer to 80%. If you're not including the federal government, then it's more like 55%. Take out the Fed and state/local governments and it gets closer to 35%-36%.
It’s all the pension funds that own part of the debt that should be worried.
Posted on 5/19/25 at 4:07 pm to tgerb8
quote:Default is unconstitutional. Sans military capitulation, autocracy, or amendment, default is not an option.
Does anyone have any idea what happens to the stock market if we default?
Instead, we'd hit fiscal dominance which would disable Fed monetary control, and usefulness.
Runaway inflation would subsequently crush middle class, salaried, and fixed income folks. Flexible money would seek outperforming markets which would likely equate to flight from US companies/markets. Combined with negative inflationary demand effect, we'd enter a massive recession. It would be a very dangerous unstable time.
Posted on 5/19/25 at 8:18 pm to Bass Tiger
quote:
NO MORE CHEAP FRICKING MONEY FOR THE WELL CONNECTED!!!! Cheap money invites reckless fiscal behavior, in the government, in corporate America and in the private sector.
Good thing cheap money is exactly what this admin wants.
Posted on 5/19/25 at 8:36 pm to Diego Ricardo
I still want to know how much gold we have in Ft. Knox. Why did that conversation stop? How much do we really have? What is it valued at? I heard $30 an ounce. I think the value of the assets of the country far exceed the valuation. If that’s the case maybe our debt is not so far outsized after all.
I think the people making the decisions know our assets far outweigh their current valuation. So does that mean Major inflation or is it like a house that has appreciated in value far above the original mortgage and if there is still a mortgage the payment is a fraction of what it was 20 years ago?
We have a ton of federal land that could be sold to reduce the debt that’s on the books for likely less than $100 an acre. Priceless land. So i guess it depends on how you look at the debt. Is it really a problem?
I think the people making the decisions know our assets far outweigh their current valuation. So does that mean Major inflation or is it like a house that has appreciated in value far above the original mortgage and if there is still a mortgage the payment is a fraction of what it was 20 years ago?
We have a ton of federal land that could be sold to reduce the debt that’s on the books for likely less than $100 an acre. Priceless land. So i guess it depends on how you look at the debt. Is it really a problem?
Posted on 5/19/25 at 8:42 pm to BuckI
quote:
I believe 2/3 of the debt is owned by domestic holders, with the Federal Reserve holding the most, and the rest by foreign governments and investors.
I may not be a smart man, but where did the Federal Reserve get the money to buy that debt.
Of course they printed it, but isn’t that like writing an IOU for an IOU.
Posted on 5/19/25 at 9:09 pm to thetempleowl
We can’t cut our way to paying down the national debt. We will have to increase revenue.
Posted on 5/19/25 at 9:10 pm to TBoy
Tax rich people idiot!
Posted on 5/19/25 at 9:12 pm to BuckI
quote:It will happen. But it won’t be a case of being able to choose. When the government defaults, the dollar will become worthless. So it won’t matter if anyone gets “paid” or not.
If the worst came to worst and we could only pay one, which one should it be?
It’s a foreign concept to almost all Americans, and it’s going to be painful.
Posted on 5/19/25 at 9:18 pm to Bard
quote:The dirty little secret is banks hold a LOT of treasuries (relative to their balance sheets, bot the entire fed debt). If treasury yields rise those holding are worth a lot less. And that’s not good. Essentially what happened to SVB, but at TBTF banks.
It not only includes the Fed, but pensions, state/local governments, insurance companies, investors, etc. This accounts for ~55% of the debt ownership.
Posted on 5/19/25 at 9:20 pm to captainFid
quote:
They’ve continually kicked the can so far down the road they can’t even see it anymore.
quote:I think the consequences of dealing with it are so ugly, it’s easier to pretend it’s not a problem.
I think just the opposite. That monster has grown so large, it overshadows everything.
Posted on 5/19/25 at 9:26 pm to jonnyanony
quote:
This can't happen. We can always print more money. What happens in that case, though, is the value/return on investment goes to zero or negative. If I take out a 20-year bond and get 5% annualized return, but the dollar is worth 50% less, I'm screwed.
Functionally, no different than default. These go for about $100 art eh coin shop…
Posted on 5/19/25 at 9:27 pm to PerplenGold
quote:The good news… we wont have to worry about a trade deficit anymore.
Sure, out of control printing leads to massive inflation and in worst cases default. All part of the death spiral.
Posted on 5/19/25 at 9:30 pm to NC_Tigah
quote:
Default is unconstitutional. Sans military capitulation, autocracy, or amendment, default is not an option.
The government doesn’t get to choose. Posted on 5/19/25 at 9:53 pm to BuckI
The fact that anyone believes that debt ever gets fully paid off is laughable. Who is going to make us pay when others don’t pay their own? Remember we still hold the biggest stick and when it comes down to it, that’s all that matters.
Posted on 5/19/25 at 10:00 pm to Diego Ricardo
You’re a retard. We’re not the only one with lots of nuclear bombs
Posted on 5/19/25 at 10:34 pm to BuckI
You start by auditing the Federal Reserve to determine if they are actually owed anything. We might be surprised how much of that would disappear when sunlight hits it.
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