These forums have been archived and are now read-only.

The new forums are live and can be found at https://forums.eveonline.com/

Out of Pod Experience

 
  • Topic is locked indefinitely.
Previous page123Next page
 

I am sick and tired of the "China owns US Debt" thing.

Author
Riedle
Brutor Tribe
Minmatar Republic
#21 - 2012-08-15 14:15:38 UTC
Quote:
Mostly because dollars wear out, international trade is mostly done in dollars so other government rely heavily on having large stockpiles of US Dollars laying about, and we've been consistantly short on the amount of Dollars in circulation for a couple of decades.


You do know that physical currency only accounts for like 10% of the money supply, right? What you said here is indicative that you perhaps don't know what you are talkng about and should do more research.

Quote:
No one is forcing anyone to accept Dollars in their stores, but a company or government trying to buy a large number of cars, iphones, or technical expertise finds it easier to get these things in Dollars than other currencies. This is the same as when Pounds Sterling or Roman Denarius were the big currency on the block in international commerce. It will be the case when the US ceases to exist as a major economic power and a different currency becomes to the medium of international trade.


Correct - today it is in their interests to do so, otherwise they would not. What you seem to be minimizing is the impact of unsustainable US federal debt may have on this self interest in continuing to do so.

The USA is not in good financial shape right now. Because it is better than Europe just goes to show just how bad of shape Europe is in. Look at the Euro for an example. OPEC was entertaining the fact, only a few years ago, of switching their denominations over to the Euro. Do you hear any talk about that now? Of course not. Why? Because the Euro area is saddled with unsustainable debt and the USA is quickly catching up.

If you want to rant about something, rant to your political representative in the USA to stop it.
A Soporific
Perkone
Caldari State
#22 - 2012-08-15 15:40:29 UTC
Riedle wrote:
Yes, what I am saying is that if the USA stays on this same debt addled track the perception of the US Treasury being a safe harbour can and will change. The change happens FAST. Look at Spain and Italy. They too had low yields, until they didn't.
The perception of their debt being 'safe' changed and their yields went up because all of a sudden it was thought riskier to hold that debt. Full stop. If the yield starts to go up on US Treasuries it is basically game over.


Yes, if the perception changes then borrowing becomes untenable. In fact, one of the big differences between the Dutch and England during the Early Modern Period that made the Dutch powerful and the English dirt poor was the habit that British Royalty had of declaring that they didn't owe anyone anything, and banishing anyone who said otherwise.

All that being said, Spain and Italy are poor exemplars because they were never consiered safe. You can see that despite a similar debt situation, Japan and France haven't suffered the same situation. This is because the tipping point varies significantly from country to country. It's a matter of perception moreso than math. At no point can you say "At this Debt to Revenue Ratio lending becomes prohibitively expensive". That's because that ratio depends upon reputation, legal protections, market factors, and who owns your debt and why. The United States is remarkably well insulated in these respects, but that isn't an excuse for inaction.

It's just that austerity works better at higher growth rates than in a stagnate or shrinking economy. Seriously, read anything even remotely Keynsian, like all the research into the Great Depression indicates this. Austerity at low or negative growth rates hurts way more than it helps.

Quote:
The perception, today, is that net public debt needs to be at a proprotion to the size of the respective economy issuing it. It is really quite an arbitrary measure. It is essentially Debt/GDP. In the USA, today and into the future, the Debt is growing faster than the economy. That is not good. It is not sustainable and yet there is a party that is runnng on the basis that that is the ethical thing to do. It is the most forseeable crisis in history and the USA (and many others) is marching relentlessly towards it.

It's not a good thing and it is not normal either.

China holding a significant chunk of this debt is just another unfortunate wrinkle in this ugly affair.


It's growing faster than the economy because of problems with the economy, not necessarily problems with debt. It's only unsusutainable if ther is no higher growth rate in the upcoming decade. Remember, government don't pay down debt through tax rate increases and spending cuts. They pay down debt through windfall growth from booming economies, or the massive write offs that come from war, coups, and massive natural disasters.

All other things constant is a terrible assumption to make in most cases, because it has never been and never will be true.


Quote:
You do know that physical currency only accounts for like 10% of the money supply, right? What you said here is indicative that you perhaps don't know what you are talkng about and should do more research.


Absolutely, especially since most of the money "printing" has been through Quantative Easing and the lowering of requirements on Banks to hold cash reserves as opposed to actually printing money. However, I was addressing Sturmwolke's commentary about "where is the sink" to address the higher rates of physical money production. Virutally all the current physical money production is to replace physical money that is leaving circulation due to wear, and most of the difference has been soaked by companies and nations establishing physical money reserves as a hedge and for international trade.

I did specify that I was specifically referring to Sturmwolke's comment, did I not?

Quote:
Correct - today it is in their interests to do so, otherwise they would not. What you seem to be minimizing is the impact of unsustainable US federal debt may have on this self interest in continuing to do so.

The USA is not in good financial shape right now. Because it is better than Europe just goes to show just how bad of shape Europe is in. Look at the Euro for an example. OPEC was entertaining the fact, only a few years ago, of switching their denominations over to the Euro. Do you hear any talk about that now? Of course not. Why? Because the Euro area is saddled with unsustainable debt and the USA is quickly catching up.

If you want to rant about something, rant to your political representative in the USA to stop it.


Eventually the dollar will no longer be the medium of international exchange. However, the current debt crisis will be over one way or another well before that becomes an issue. Why? Because it takes time to change the medium of international exchange. It took half a century and a World War for the Dollar to supplant the Pound Sterling. It took a similar set of circumstances for the Ducat to be replaced by the Pound Sterling. We'd have bigger issues
Riedle
Brutor Tribe
Minmatar Republic
#23 - 2012-08-15 17:16:04 UTC

Quote:
All that being said, Spain and Italy are poor exemplars because they were never consiered safe.


Uhh, yes they were. Government treasury bonds of virtually all developed countries were considered the very safest investment there was up until a couple of years ago.

Quote:
It's just that austerity works better at higher growth rates than in a stagnate or shrinking economy. Seriously, read anything even remotely Keynsian, like all the research into the Great Depression indicates this. Austerity at low or negative growth rates hurts way more than it helps.


Ahh, but this is where we differ and I suspect why we view the situation differently. I am not a keynesian. I am a hybrid Austrian/Chicago school of economics. From my perspective and from lots of research, public spending only crowds out private investment. Being a keynesian was all the rage in 2008 and in fact, is a lot of the reason we are in this mess. Keynesian ecomincs is essentially just kicking the can down the road a generation. Unfortunately, with the demographic situation in western society being what it is, we are running out of generations to kick the can to which is why we find ourselves where we are.

Quote:
It's growing faster than the economy because of problems with the economy, not necessarily problems with debt. It's only unsusutainable if ther is no higher growth rate in the upcoming decade. Remember, government don't pay down debt through tax rate increases and spending cuts. They pay down debt through windfall growth from booming economies, or the massive write offs that come from war, coups, and massive natural disasters.


No, in Canada we were paying down net debt for 13 straight fiscal years prior to 2008 when the Keynesians started yelling for stimulus. It was not a windfall at all. It was prudent fiscal management. Canada cut it's spending in real terms and thereafter kept spending increases in line with revenue growth eliminating the deficit and enabling net debt pay down. No windfall required.


Quote:
Eventually the dollar will no longer be the medium of international exchange. However, the current debt crisis will be over one way or another well before that becomes an issue. Why? Because it takes time to change the medium of international exchange. It took half a century and a World War for the Dollar to supplant the Pound Sterling. It took a similar set of circumstances for the Ducat to be replaced by the Pound Sterling. We'd have bigger issues


No, if the dollar is supplanted as the internation reserve currency, it will be a sudden shift and it will be a catastrophic one if the USA is in the same fiscal shape it is today (or more likely, much worse). If the USA gets its debt under control then the transition, if it ever happens, could be relatively harmless. I aslso do not see it as inevitable that this happens - if the USA is able to bring a measure of sanity back to the management of it's finances.
Astenion
University of Caille
Gallente Federation
#24 - 2012-08-15 17:30:27 UTC  |  Edited by: Astenion
Riedle wrote:
Hopefully the Americans wake up and put someone in there with some fiscal sanity or all of the developed world is going to go the way of Greece, Spain, Ireland, Italy et al.


Explain to me how Italy's economy is anything like the situation with Spain, Ireland, and Greece. If you're gonna play internet fiscal regulator, at least try to know something about those names you're dropping.

Seeing as how you know so much about the European economy, please explain to everyone how long you've lived in Europe and how many different European countries you've lived in to make such assumptions. Just because you see a blurb in Yahoo News or a Time magazine cover doesn't make you informed. If you had been informed, you wouldn't have mentioned Italy as one of the PIGS because you would've known that Italy is completely solvent and too big to bail out. This is why it introduced austerity measures and raised taxes instead of sticking its hand out for a bailout. If Italy were to be bailed out, it would collapse the EU.

Italy is the third largest exporter of goods in Europe and the 6th or 7th in the world...it doesn't need a bailout. It is, in effect, in the same position of the US right now, only with 13 trillion less in debt. Italy is to the PIGS what Ford is to Chrysler.

And yet, everyone here still carries on. Everyone still has their homes, everyone still buys new stuff, everyone still has fun, everyone still pays their bills. It's just not as bad as everyone is making it out to be. The situation isn't good, but the sky isn't exactly falling either. Things have always been criminally expensive here and they always will be. That's what happens when you have a country of 60 million people living in the space of a country the size of Italy. The fact is, Italy has NEVER done well under the EU. EVER. Some say it would be better to go back to the lira but that wouldn't solve anything.
Riedle
Brutor Tribe
Minmatar Republic
#25 - 2012-08-15 19:10:03 UTC

Quote:
Explain to me how Italy's economy is anything like the situation with Spain, Ireland, and Greece. If you're gonna play internet fiscal regulator, at least try to know something about those names you're dropping.


Ummm.. ok

Italy's Debt to GDP Ratio: 120%
Irelands Debt to GDP Ratio: 105%
Greece Debt to GDP Ratio: 160%

Also, all have been experiencing natural population decrease for many years.

Need I say more?

Quote:
Seeing as how you know so much about the European economy, please explain to everyone how long you've lived in Europe and how many different European countries you've lived in to make such assumptions. Just because you see a blurb in Yahoo News or a Time magazine cover doesn't make you informed. If you had been informed, you wouldn't have mentioned Italy as one of the PIGS because you would've known that Italy is completely solvent and too big to bail out. This is why it introduced austerity measures and raised taxes instead of sticking its hand out for a bailout. If Italy were to be bailed out, it would collapse the EU.


Oh, I see. I have to live in or have lived in Europe to talk about it's economy? Isn't that a logical fallacy? Do I need to have been alive during the 1930's to know the great depression was pretty depressing? Or should I have been alive in the 1930's and 1940's to comment on Nazi Germany being a pretty bad governing regime? lol just ridiculous.

Italy is in terrible shape. Look at that Debt to GDP ratio. It's huge. Becoming Greece like really. Although, I do agree, if they fail it will collapse the EU. In reality though, the EU is probably going to collapse anyways. But if you want to regale us all with how awesome the government finances of Italy are and these numbers are all made up, feel free. lol

Quote:
And yet, everyone here still carries on.


Is that what you call what they are doing in Greece? Carrying on?

Quote:
Everyone still has their homes, everyone still buys new stuff, everyone still has fun, everyone still pays their bills. It's just not as bad as everyone is making it out to be. The situation isn't good, but the sky isn't exactly falling either. Things have always been criminally expensive here and they always will be. That's what happens when you have a country of 60 million people living in the space of a country the size of Italy. The fact is, Italy has NEVER done well under the EU. EVER. Some say it would be better to go back to the lira but that wouldn't solve anything.


gotcha. So Italy is pretty much bankrupt but the populace are still walking along oblovious to it so it's all cool. Seems like a good way to run a country. Into the ground.

Riedle
jason hill
Red vs Blue Flight Academy
#26 - 2012-08-15 19:38:29 UTC
I though our debt (per head of household) was higher than everybody else was ?.

we are bloody skint !
A Soporific
Perkone
Caldari State
#27 - 2012-08-15 20:00:43 UTC
Government bonds as a class are still considered the safest class of investment, but the bonds of individual countries, states/provinces, and localities are considered significantly less safe than others. Spain and Italy were on the lower end of this scale to begin with. But I do have to ask, why would the US be more like Spain and Italy than France or Japan?

Keynsian Economics was a direct reaction to the Great Depression. And if it was all the rage in 2008, then why did government react in almost the exact same way that they did during the early portion of the great depression? If it was popular, it really wasn't used. I'm generally Neoclassicist in my views, but when it comes to reacting to depression then there are lessions to be learned here.

I do believe that I was imprecise with my terms. It's not uncommon for government to have periods of growth where through prudent fiscal management they reduce or eliminate debt. This is exactly what I am talking about. What doesn't happen is austerity reducing or eliminating debt in periods of contraction or stagnation. Windfall might not have been the proper term, but that's how I characterize the painless debt reduction that you experience under those conditions since it's predicated on independant revenue growth. I am of the opinion that attempting to tackle debt during recession or unstable economy is an inherently bad idea because it's doing so when we are least capable of success.

Why would it be any different than previous examples we have in the modern period? The only cases we have of total currency collapse are in conjunction with a general government collapse, as in the case of the USSR. Although, that brings up the paradox that is the Somalian Shilling.
Astenion
University of Caille
Gallente Federation
#28 - 2012-08-15 22:23:09 UTC  |  Edited by: Astenion
No, Riedle. The population isn't oblivious to any of it. I never said it was in good shape, I actually said it's in terrible shape. My only point was that it is not in the same boat as the PIGS...it is in a deep recession but it is completely solvent. No one said it would be fun and easy, and economically life is gonna suck for a while, but you lumped it in with the rest simply based on debt:GDP.

No, you don't see. You don't have to live in Europe to talk about its economy. You do, however, have to live in Europe to have a grasp on anything besides the theoretical. You just proved my point that you're just spouting assumptions by saying everyone's going around oblivious to it. But then again, spouting haphazard assumptions about other countries which you know nothing about and in which you have never lived has always been your forte.

Here's an idea: why don't you travel to the places you know so little about so as to be more informed and not be such an ass? Anyone can read their local news headlines, 15 second blurbs and look on some wiki page online and speculate. The fact is you don't know enough to even speculate, so knock it off.
jason hill
Red vs Blue Flight Academy
#29 - 2012-08-16 00:18:28 UTC
Astenion wrote:
No, Riedle. The population isn't oblivious to any of it. I never said it was in good shape, I actually said it's in terrible shape. My only point was that it is not in the same boat as the PIGS...it is in a deep recession but it is completely solvent. No one said it would be fun and easy, and economically life is gonna suck for a while, but you lumped it in with the rest simply based on debt:GDP.

No, you don't see. You don't have to live in Europe to talk about its economy. You do, however, have to live in Europe to have a grasp on anything besides the theoretical. You just proved my point that you're just spouting assumptions by saying everyone's going around oblivious to it. But then again, spouting haphazard assumptions about other countries which you know nothing about and in which you have never lived has always been your forte.

Here's an idea: why don't you travel to the places you know so little about so as to be more informed and not be such an ass? Anyone can read their local news headlines, 15 second blurbs and look on some wiki page online and speculate. The fact is you don't know enough to even speculate, so knock it off.




sorry to quote you on this one mate but you really cannot compare somalia and thier currency with anything that is used in the western world ...somalia is a confirmed FAILED STATE ... it would be grosslely unfair to use somalia as any sort of comparison . there are alot of religious and tribal issues going on in somalia ... but to allign them with whats happening in any country in the west is ...simply not right ...

a constructive feedback would be helpfull rather than a flame please
A Soporific
Perkone
Caldari State
#30 - 2012-08-16 00:35:35 UTC
Jason, I said Somalia, not Astenion. I brough it up because of the fact tha the currency of the government that fell in the early 90's is still in circulation. This is something of a paradox because it's a currency that is continuing to operate without any backing, central bank, or anything that makes a currency work in theory.

I'm not trying to compare it to anything except to point out that different systems operate differently even if they provide the same roles. The currency of the Soviet Union collapsed in a matter of weeks. The currency of Somalia still works more than twenty years later.

The government bond market in Greece, Spain, and Italy essentially fall apart. The bond markets in Japan and France don't, even under precisely the same conditions.

Why is the US the Soviet Ruble and not the Somalian Shilling? Why is the US bond market like Spain's and not like Japan's?

I'm not saying that it can't happen, but the assumption of low durability is one that I don't follow.
Surfin's PlunderBunny
Sebiestor Tribe
Minmatar Republic
#31 - 2012-08-16 00:39:05 UTC
A Soporific wrote:


Why is the US the Soviet Ruble and not the Somalian Shilling? Why is the US bond market like Spain's and not like Japan's?



I guess we just don't like tentacles enough Straight

"Little ginger moron" ~David Hasselhoff 

Want to see what Surf is training or how little isk Surf has?  http://eveboard.com/pilot/Surfin%27s_PlunderBunny

Reiisha
#32 - 2012-08-16 01:24:07 UTC
Riedle wrote:
baltec1 wrote:
Riedle wrote:
The worse thing than China owning over one trillion of those Treasuries bonds is that the debt is over 14 trillion and projected to be over 16 trillion soon.

This is not a good thing. Barack Obama is adding more debt than any other president in history, by any meaure and he is running an election campaign on the fact that he wants to keep on doing it.

Hopefully the Americans wake up and put someone in there with some fiscal sanity or all of the developed world is going to go the way of Greece, Spain, Ireland, Italy et al.


Riedle


What you mean like the republicans? The ones who de-regulated the markets... ..That went well..



Very incisive. You do know that the housing crash was primarly driven by Fannie and Freddie guaranteeing mortagages to private banks because of political pressure to get everyone to be a homeowner, right? Regardless of credit, income etc etc etc?

It was primarily a government induced issue. The only shady part on the part of private industry was the packaging up these crap mortgages, that the banks would never have approved on their own, and selling them as debt backed securities which the rating agencies rated as highly secure.

No one has 'de-regulated' the markets.

In Canada we never had the pressure of politcal interference in the government guaranteed mortgage pushing. Plus in Canada we cannot 'write off'' mortgage interest towards our tax bill so there is less of an incentive to want to get a home that you cannot afford. Not so in the USA


"We're just doing what we're told" doesn't really fly here. The banks did do some very very shady things - Yes they were 'forced' to give out mortgages to people who couldn't really afford them, but they split them up and sold them to banks in other countries with interest, causing the worldwide crisis. Goldman Sachs and JPMorgan executives are the ones really at fault here - They could have refused to do what the politicians told them in their advising role, instead they took it as a marketing opportunity to give out the mortgages and look good while still making a profit on them - Screw those people in other countries, right?

If you do things right, people won't be sure you've done anything at all...

Riedle
Brutor Tribe
Minmatar Republic
#33 - 2012-08-16 01:29:28 UTC
Astenion wrote:
No, Riedle. The population isn't oblivious to any of it. I never said it was in good shape, I actually said it's in terrible shape. My only point was that it is not in the same boat as the PIGS...it is in a deep recession but it is completely solvent. No one said it would be fun and easy, and economically life is gonna suck for a while, but you lumped it in with the rest simply based on debt:GDP.

No, you don't see. You don't have to live in Europe to talk about its economy. You do, however, have to live in Europe to have a grasp on anything besides the theoretical. You just proved my point that you're just spouting assumptions by saying everyone's going around oblivious to it. But then again, spouting haphazard assumptions about other countries which you know nothing about and in which you have never lived has always been your forte.

Here's an idea: why don't you travel to the places you know so little about so as to be more informed and not be such an ass? Anyone can read their local news headlines, 15 second blurbs and look on some wiki page online and speculate. The fact is you don't know enough to even speculate, so knock it off.



Gotcha

Me: Italy is in terrible fiscal shape based on debt, deficits, negative real population growth, productivity and corruption

You: "Shut up I live here and people buy stuff."

Always a pleasure lols

Riedle
Brutor Tribe
Minmatar Republic
#34 - 2012-08-16 01:35:20 UTC
Quote:
Government bonds as a class are still considered the safest class of investment, but the bonds of individual countries, states/provinces, and localities are considered significantly less safe than others. Spain and Italy were on the lower end of this scale to begin with. But I do have to ask, why would the US be more like Spain and Italy than France or Japan?


No, you are incorrect. Government debt of all western countries was considered the safect investment one could make up until a few years ago. That includes Spain, Italy et al.

Quote:
Keynsian Economics was a direct reaction to the Great Depression. And if it was all the rage in 2008, then why did government react in almost the exact same way that they did during the early portion of the great depression? If it was popular, it really wasn't used. I'm generally Neoclassicist in my views, but when it comes to reacting to depression then there are lessions to be learned here.


What? Virtually all western countries primed the pump with 'stimulus'. That is a keynesian reaction and look at us now.
Half of the EU is bankrupt in real terms and the EU will break up shortly because of 'keynesian' economics and a bloated welfare state based on an inverted population growth curve.

Quote:
I do believe that I was imprecise with my terms. It's not uncommon for government to have periods of growth where through prudent fiscal management they reduce or eliminate debt. This is exactly what I am talking about. What doesn't happen is austerity reducing or eliminating debt in periods of contraction or stagnation. Windfall might not have been the proper term, but that's how I characterize the painless debt reduction that you experience under those conditions since it's predicated on independant revenue growth. I am of the opinion that attempting to tackle debt during recession or unstable economy is an inherently bad idea because it's doing so when we are least capable of success.


Well I agree that reducing net debt during a finanicial downturn probably isn't the best monetary policy it looks better than what Obama did which was to make the temprary fiscal stimulus the 'new normal' in federal expenditures and in turn, spend more money than all the other presidents in the history of the republic in less than 4 years. lol

Quote:
Why would it be any different than previous examples we have in the modern period? The only cases we have of total currency collapse are in conjunction with a general government collapse, as in the case of the USSR. Although, that brings up the paradox that is the Somalian Shilling.
[/quote

uhhh... you be missing a few. Weimar Germany ring a bell? more recent? check out Argentina in the 90's.

Riedle
Brutor Tribe
Minmatar Republic
#35 - 2012-08-16 01:40:18 UTC  |  Edited by: Riedle
Quote:
"We're just doing what we're told" doesn't really fly here. The banks did do some very very shady things - Yes they were 'forced' to give out mortgages to people who couldn't really afford them, but they split them up and sold them to banks in other countries with interest, causing the worldwide crisis. Goldman Sachs and JPMorgan executives are the ones really at fault here - They could have refused to do what the politicians told them in their advising role, instead they took it as a marketing opportunity to give out the mortgages and look good while still making a profit on them - Screw those people in other countries, right?


That is pretty much what I said. I maintain however, that the majority of the culpability has to belong to the drug pusher though, not the addict.
The government was the kingpin in this ponzi scheme and JP Morgan et al were really only street pushers in comparison.

Riedle
A Soporific
Perkone
Caldari State
#36 - 2012-08-16 02:09:49 UTC  |  Edited by: A Soporific
Riedle wrote:
Quote:
Government bonds as a class are still considered the safest class of investment, but the bonds of individual countries, states/provinces, and localities are considered significantly less safe than others. Spain and Italy were on the lower end of this scale to begin with. But I do have to ask, why would the US be more like Spain and Italy than France or Japan?


No, you are incorrect. Government debt of all western countries was considered the safect investment one could make up until a few years ago. That includes Spain, Italy et al.

Quote:
Keynsian Economics was a direct reaction to the Great Depression. And if it was all the rage in 2008, then why did government react in almost the exact same way that they did during the early portion of the great depression? If it was popular, it really wasn't used. I'm generally Neoclassicist in my views, but when it comes to reacting to depression then there are lessions to be learned here.


What? Virtually all western countries primed the pump with 'stimulus'. That is a keynesian reaction and look at us now.
Half of the EU is bankrupt in real terms and the EU will break up shortly because of 'keynesian' economics and a bloated welfare state based on an inverted population growth curve.

Quote:
I do believe that I was imprecise with my terms. It's not uncommon for government to have periods of growth where through prudent fiscal management they reduce or eliminate debt. This is exactly what I am talking about. What doesn't happen is austerity reducing or eliminating debt in periods of contraction or stagnation. Windfall might not have been the proper term, but that's how I characterize the painless debt reduction that you experience under those conditions since it's predicated on independant revenue growth. I am of the opinion that attempting to tackle debt during recession or unstable economy is an inherently bad idea because it's doing so when we are least capable of success.


Well I agree that reducing net debt during a finanicial downturn probably isn't the best monetary policy it looks better than what Obama did which was to make the temprary fiscal stimulus the 'new normal' in federal expenditures and in turn, spend more money than all the other presidents in the history of the republic in less than 4 years. lol

Quote:
Why would it be any different than previous examples we have in the modern period? The only cases we have of total currency collapse are in conjunction with a general government collapse, as in the case of the USSR. Although, that brings up the paradox that is the Somalian Shilling.
[/quote

uhhh... you be missing a few. Weimar Germany ring a bell? more recent? check out Argentina in the 90's.



1) Yes, a few years ago there wasn't a debt crisis, so it was largely a very safe bet. Still, not all sovereign debt warranted investment grade ratings. There were signifcant differences in interest rate and security ratings, and those persist. While all bonds are less safe now than they were a few years ago, there is still a very large difference in risk and rate between bonds different sovreign bonds. So, it begs the question, why would US Treasury bonds act like those of Spain or Italy when that isn't the only behavior exhibited by bonds?
2) The same thing happened during the Great Depression, a bout of untargeted spending followed by austerity. Welfare States are simply a bad idea, and make it harder for economies to function under any situation, so I don't really see how that works. However, long-period public works projects and consistant support for entrepenurship would likely help signifcantly if they are pursued in any meaningful way. The former provides work in the mean time and improves crumbling or nonexistend infrastructure and the latter speeds recovery by replacing dead or dying firms and potentially spawning a new growth industry. When the economy recovers, just don't renew the works projects and let the entrepeneurial support expire and you have yourself the money to pay down the debt you incurred.
3) I certainly don't want to defend existing budgets, or the way things were handled this time around. I agree that things have to change. I just doubt the capability to change prior to a clear recovery, and don't feel that the US is in danger of either immediate default or a short term collapse in the bond market. I think that last sentence sums up the entrety of our disagreement.
4) If we were talking about hyperinflation a better modern example would be Zimbabwe. I was trying to use examples where the governing banks dissolved. Although, upon further review it appears that the the transition between Soviet and Russian reserve banks was handled much more smoothly than I thought when I commented originally, so it probably isn't an effective comparison.
alittlebirdy
All Hail The Liopleurodon
#37 - 2012-08-16 05:15:30 UTC
You are all idiots... the USA sucks, like every other place you think anyone cares about YOU? You all are nothing but pawns... and dumb pawns at that.

ALLLLLLL the bail outs that were done... was to take money from you and give it to others

NOT to save jobs... Not to save us money (either way the whole thing is counter to the very foundation of the US anyway)

It was to give rich people MORE money

All this debt, SS, wellfair, etc... NONE should exist in the USA.

The big three should have went under PLAIN AND SIMPLE.

No 100000000000000000000 jobs would have been lost... honda builds cars in the USA, toyota... USA...

All that would have happened is they would have bought up everything and got the american workers back building GOOD cars and trucks. After all that demand has to be filled somehow.

But nope we give money to these "to big to fail" guys and never break them up?

And all you assholes Americans who live in a "democracy" (it’s a constitutional republic morons, what does the pledge of allegiance say? One REPUBLIC.) Just are too dumb to see it.

PS... SMART american here.

The usa is spent into a hole it NEVER plans to get out of...
Surfin's PlunderBunny
Sebiestor Tribe
Minmatar Republic
#38 - 2012-08-16 05:24:46 UTC
A smart American wouldn't have spelled 'welfare' wrong and knows the difference between 'to' and 'too' Big smile

"Little ginger moron" ~David Hasselhoff 

Want to see what Surf is training or how little isk Surf has?  http://eveboard.com/pilot/Surfin%27s_PlunderBunny

rodyas
Tie Fighters Inc
#39 - 2012-08-16 05:33:12 UTC
Riedle wrote:
rodyas wrote:
Bush created a lot of debt, it was no big deal, No barack obama creates debt and its no big deal. Nice things always cost money, and no way to go around it. See the US is a nice thing, and the chinese buys us. If anything they should make a chinese, american, pretty woman. Where China is the hot business man going no where. And they meet the hot and attractive US and try to shack up all the time.

Like I could be in debt, but I would have a blue-ray player the whole time while in debt. So is debt really that bad?


Is this satire with regards to the intellect on the part of the far left still stubbornly clinging to their entitelments and demanding more when they are plainly unsustainable?

Or are you smart like tractor?



Smart like tractor, where I do all the hard work in the field, and don't whine the whole time.

But I do see some points. Some people worked here a lot, but were never allowed to have something nice, or their work never amounted to anything. That is pretty sad.

Be hard to understand my points if that is how you feel.

Signature removed for inappropriate language - CCP Eterne

Astenion
University of Caille
Gallente Federation
#40 - 2012-08-16 11:07:55 UTC
Riedle wrote:
Gotcha

Me: Italy is in terrible fiscal shape based on debt, deficits, negative real population growth, productivity and corruption

You: "Shut up I live here and people buy stuff."

Always a pleasure lols



Yes, that's exactly what I'm saying. Roll /sarcasm

The funny thing is that I'm not even arguing with your above statement. And again, all I'm saying is that Italy is solvent, whereas for some reason you can't understand that. You seem to think that Italy has failed and is part of the PIGS, and all I'm saying is that it's not. What I'm saying is that you need perspective, that's all.

The negative real population growth will end up helping the country because the average age in Italy is like 50-something; there are too many old people. Italians literally NEED to start dying off more in order to improve this situation. It's overpopulated and antiquated due to citizens having one of the longest life spans of any other country. In other words, we need more old people to croak because they're ******* up everything for the next generation. In short, out with the old, in with the new. The problems with deficits, productivity, and corruption all quite literally stem from too many old people. Once they start dying off, things will finally get rolling.

Again, I'm not arguing with your above point at all...my original point is simply that you cannot lump them into the same category as the PIGS, that's all.


Previous page123Next page