US will hit debt limit in mid-Oct

[blackhawk]

 

[OohPooPahDoo]

OK so ignorant and stupid.

The Fed traditionally sets only short term rates. Their intervention in longer term rates through bond buying is unprecedented.

That doesn't make it any more "artificial" than the fed buying short term bonds - setting the standard that just because it hasn't happened before it isn't "real" is arbitrary.

 

[Toro]

Actually, yes, the debt ceiling can be risen forever if nominal GDP rises as fast or faster than debt accumulation.

Even if that were true (which it isn't) the debt has been accumulating faster than growth in economic output for over a decade and it will only accelerate when interest rates begin rising toward real market rates (not to mention the necessity to account for massive future liabilities), that's why our debt to GDP ratio has been steadily rising. We are heading for an implosion of the currency and the more debt we take on the faster it will arrive. It's absolutely immoral and stupid to continue on with this nonsense.

"real market rates" ? LOL. What rates are they at now?

Higher interest is usually correlated with higher inflation. That will take off some of the pressure. The treasury is also presently trying to increase the average maturity of debt outstanding, locking in long term rates.

Global real, i.e. after inflation, interest rates are roughly 0.5%, maybe a little higher. Global inflation is about 2%. So the global duration-weighted nominal interest rate is about 2.5%. Rates will normalize eventually. Historically, real global rates have averaged 2.5%-3%. So, when rates normalize, they will rise to 4.5%-5%. Rates are being depressed by central bank buying and relatively slow growth. Kimura might be able to shed more light on this.

I used to think the end game was some sort of currency crisis. However, gold falling 33% from the peak and stocks up by about the same amount makes me think I was wrong. Market behavior is suggesting that Bernanke might be right in the end.

 

[The T]

Well, time to tell the old people that the money they socked away with the government isn't there unless the government can borrow more of it.

IT never occurs to anyone that if you are running out of money, you cut spending on non essential things....Like Congress, Departments of Education, foreign aid to our enemies, and the other 1 trillion dollars in discretionary spending.

Borrow or print it in the ETHER...

Open a file, add a few dozen zeros, and viola!

Money to burn!!!!

Precisely...just wait for the creditors when they come calling...(speaking of burning)...

 

[billyerock1991]

hmmmmm I wonder what will happen this time....

easy .... if the republicans don't pass the debt ceiling they will lose in the next election big time ... that's what will happen .... when people on social security don't get their checks, they'll be pissed .... when the police and fire departments don't get their pay checks, they will be pissed .... when road crews that are working on the water and highways don't get their pay checks, they will be pissed ... when the men in the military don't get their pay checks, they will be pissed when all the docks are shut down in the country, they will be pissed .... then they will look at who said they will not pass the debt ceiling ... then say, "well looks like who I'm not going to vote for next election" ... as I said....the republicans will lose big time .....

BWA HAHAHAHAHAHAhAHAHAhAhAhAhA !!!!!

 

[theDoctorisIn]

I always enjoy these Econ class threads. There's always one or two posters who actually know what they're talking about, and then a peanut gallery of people who just repeat buzzwords they heard on tv.

I know enough about economics to know that I don't know shit about economics.

 

[billyerock1991]

Well, time to tell the old people that the money they socked away with the government isn't there unless the government can borrow more of it.

IT never occurs to anyone that if you are running out of money, you cut spending on non essential things....Like Congress, Departments of Education, foreign aid to our enemies, and the other 1 trillion dollars in discretionary spending.

you better go and learn what the debt ceiling is about, cause you don't know

 

[billyerock1991]

The Government needs to be rounded up put in an insane asylum . Amazing how the American tax payer is helpless to stop this endless insanity .

it can be stopped we vote out as MANY REPUBLICANS AS WE CAN

 

[Nova78]

Give the American people what they want(bread and circuses).

Tell that to the future generations of Americans that will have to foot the bill for 'em.

At the rate these dipshits in Government spend money, there will be no future generations .................

 

[The Rabbi]

OK so ignorant and stupid.

The Fed traditionally sets only short term rates. Their intervention in longer term rates through bond buying is unprecedented.

That doesn't make it any more "artificial" than the fed buying short term bonds - setting the standard that just because it hasn't happened before it isn't "real" is arbitrary.

The Fed doesnt buy short term bonds to set rates.
Fed intervention in markets makes the results artificial. LEft to themselves interest rates would be much higher.

You really have no fucking clue what you are talking about. I'd suggest stopping before you completely humiliate yourself.

 

[Little-Acorn]

BTW, the National Debt STILL isn't rising, and hasn't appreciably risen since last March.

And the Federal retirement accounts and other "Trust" funds the Fed has been quietly draining every since we hit the Debt Ceiling, are just about empty now.

You can keep a lid on a volcano for only so long.

Something unpleasant is going to happen very soon.

 

[Nova78]

No more debt increases!

That would be great, if you have 10 dollars you do not spend 20. I think Obama failed math ...............