BullKurtz
Gold Member
- Banned
- #21
The people who buy US Treasuries are already demanding higher interest payments as a result of the mere threat of a default.
Should the October 17 deadline come and go without a resolution to the crisis, yields will rise even higher.
Tens of trillions of interest rate swaps will be affected. And that means businesses and municipalities and pension funds will suddenly be thrust into bankruptcy.
And there is a risk of the bond bubble bursting in catastrophic fashion since higher rates means the street value of every existing bond will plummet. Bondholders will start flooding the market trying to sell their trash, and there will be a shortage of buyers.
That's what we are looking at.
It's all been an illusion since the 1970s....fiat currency based on our past wealth. When we finally devolved into a housing economy, the end was clearly in sight. Before WW2 a home was considered a liabiltiy that continually needed new paint and shingles. After Y2K, suddenly a home was appreciating by 25% a year in many areas. Then along came the bogus CRA loans thanks to Clinton that the banks had to write or be accused and sued for "racist red-lining". The bankers decided to turn the tables by bundling the crap with the crystal and damn near crashed the whole world's financial house of cards.
Even if Barry had wanted to restore the good times, he couldn't. Not enough taxpaying jobs out there to furnish the Treasury with black ink. So instead of pulling in the tentacles and causing his voters some pain, he chickened out and kept borrowing. The old GOP watched and bitched a little, then went quiet. Thank God for the Tea Party. We're in a mess. We can try to patch and bandage it but we're bleeding to death. Only way out is to pull the plug and let the chips fall where they may. It's gonna hurt like a bitch but then, pain is only weakness leaving the body. We can rip out the termite-riddled foundation and do it right this time. Take away the money and the Feds answer to US again, like the Founders intended.