maple_leafs182 Posted August 9, 2011 Report Share Posted August 9, 2011 I wanna ask a question, do you think raising the debt ceiling was a good thing? Quote Link to comment Share on other sites More sharing options...
Bonam Posted August 9, 2011 Report Share Posted August 9, 2011 I wanna ask a question, do you think raising the debt ceiling was a good thing? Well... I'm all for reducing spending, reducing the deficit, getting back into surplus, and paying back the debt. Unfortunately, even if the democrats and republicans had both agreed to double taxes and/or cut spending in half as soon as such changes could possibly be implemented, the reality is, the US would still have hit the debt ceiling before that could go into place. The debt ceiling had to be raised or it would have caused all kinds of chaos. Anyway, the US debt situation isn't that catastrophic yet. It's only about 1 year of GDP. The deficit is catastrophic, it's almost 2 dollars spent for every one that comes in, or was a while ago, but the situation is not yet beyond the point of no return. The US still has a decade or so to get its books in order. Quote Link to comment Share on other sites More sharing options...
maple_leafs182 Posted August 9, 2011 Report Share Posted August 9, 2011 Well... I'm all for reducing spending, reducing the deficit, getting back into surplus, and paying back the debt. Unfortunately, even if the democrats and republicans had both agreed to double taxes and/or cut spending in half as soon as such changes could possibly be implemented, the reality is, the US would still have hit the debt ceiling before that could go into place. The debt ceiling had to be raised or it would have caused all kinds of chaos. Anyway, the US debt situation isn't that catastrophic yet. It's only about 1 year of GDP. The deficit is catastrophic, it's almost 2 dollars spent for every one that comes in, or was a while ago, but the situation is not yet beyond the point of no return. The US still has a decade or so to get its books in order. I wish I could be that optimistic, I don't believe the US has a decade or so. I know it would of been devastating if the US would have not increased the debt ceiling and the US defaulted but I think it would of been better then the US piling on more debt and pushing the problem down the road to a later date. I think at the pace the US is going at now, they are setting themselves up for a rejection of the US dollar as the worlds reserve currency which will be an even bigger problem and more devastating then if they had just defaulted now. Quote Link to comment Share on other sites More sharing options...
Bonam Posted August 9, 2011 Report Share Posted August 9, 2011 (edited) I wish I could be that optimistic, I don't believe the US has a decade or so. I know it would of been devastating if the US would have not increased the debt ceiling and the US defaulted but I think it would of been better then the US piling on more debt and pushing the problem down the road to a later date. I think at the pace the US is going at now, they are setting themselves up for a rejection of the US dollar as the worlds reserve currency which will be an even bigger problem and more devastating then if they had just defaulted now. Countries have had far far higher debt/gdp ratios before and recovered just fine. I don't see any fundamentally unprecedented factors at play now than have been at play in prior recessions. Btw, so what if some other currency eventually supercedes the USD as the global reserve currency? When/if that happens, the value of the USD will fall, stimulating exports and domestic production. Hardly the end of the world. You have to look at the fundamentals: America is a nation of relatively highly skilled and capable people, with good infrastructure, world leading educational and research institutions, the home to most of the world's most successful corporations, the world's third largest population and area, etc. Even if it loses its #1 position, it will still remain a good country to live in. Edited August 9, 2011 by Bonam Quote Link to comment Share on other sites More sharing options...
TimG Posted August 9, 2011 Report Share Posted August 9, 2011 (edited) When/if that happens, the value of the USD will fall, stimulating exports and domestic manufacturing. Hardly the end of the world.For all the whining about US profligacy, a large portion of the blame rests on the Chinese who, instead of letting their currency rise, chose to hold down there currency and amass large holdings of US debt in order to balance the trade books (because the trade books ALWAYS need to be balanced no matter what happens to the trade in goods). This meant that US interest rates were lower than they should have been and the US currency is higher than it should be.It is the same problem with the euro where the belief that EU would back sovereign debt of its members made borrowing too cheap for the Greeks. Edited August 9, 2011 by TimG Quote Link to comment Share on other sites More sharing options...
eyeball Posted August 9, 2011 Report Share Posted August 9, 2011 It's hard for millioinares sitting in congress to grasp the idea that all can suddenly come crashing down and THEY might themselves be in the soup line - It is possible! They'll probably BE the soup. Quote Link to comment Share on other sites More sharing options...
Bonam Posted August 9, 2011 Report Share Posted August 9, 2011 They'll probably BE the soup. Wouldn't be much soup to go around if you only made it out of millionaires. Quote Link to comment Share on other sites More sharing options...
eyeball Posted August 9, 2011 Report Share Posted August 9, 2011 Wouldn't be much soup to go around if you only made it out of millionaires. Maybe they'd be better suited as a garnishing - a decorative statement of taste and refinement. Quote Link to comment Share on other sites More sharing options...
Oleg Bach Posted August 9, 2011 Report Share Posted August 9, 2011 I wanna ask a question, do you think raising the debt ceiling was a good thing? For the mind set of the super spoiled and wealthy - raising the debt ceiling was a good thing. It was kind of like going to the bank - that their brother runs and taking out a huge loan that they personally will never have to pay -it is an arrogant and selfish move - raising the loaning ability of a certain small group will only burden the have nots a little more - Unless they all - rich and poor -share in the pain and the repair of the American economy - they will have what they have in the UK...now do we want that shit here? Quote Link to comment Share on other sites More sharing options...
WIP Posted August 9, 2011 Report Share Posted August 9, 2011 You said that after the recession in 2008/2009 too. We had a bull market since then for about 2 years. It was pretty easy to have doubled or even tripled your portfolio in that time, with many stocks of major corporations showing those gains. The current market retreat will present another excellent buying opportunity once it bottoms out. Like maple_leafs said, this just looks like it was another market bubble created by free money from the Federal Reserve. If I was a cynic, I'd suspect that the Obama Whitehouse was just trying to boost the GDP numbers enough to look good for re-election. What really bothers me when all of the economists gather to discuss how to grow the economy, is that economic theory from left and right just assumes that the resources needed to make their theories work, are going to keep on growing to meet growing demands. I don't find very many economists trying to grapple with the question of whether we are heading into biosphere limits to growth...but at least there's one or two pondering how to keep capitalism working in an overcrowded, resource-depleted world: John Fullerton: When Growth Bumps Into the Biosphere Quote Link to comment Share on other sites More sharing options...
punked Posted August 9, 2011 Report Share Posted August 9, 2011 Like maple_leafs said, this just looks like it was another market bubble created by free money from the Federal Reserve. If I was a cynic, I'd suspect that the Obama Whitehouse was just trying to boost the GDP numbers enough to look good for re-election. If you suspect the Obama Whitehouse then it just shows you don't know how the Federal Reserve works in the US. Thanks for playing. Quote Link to comment Share on other sites More sharing options...
bush_cheney2004 Posted August 9, 2011 Report Share Posted August 9, 2011 Today's Paradox: After an unprecedented downgrade of US long term federal debt, sales of US bonds are stronger than usual: The U.S. Treasury had no trouble attracting investors to its auction of $32 billion in three-year notes on Tuesday -- the first bond sale since Standard & Poor’s cut the nation’s credit rating to AA+ from AAA on Friday. Quote Link to comment Share on other sites More sharing options...
M.Dancer Posted August 9, 2011 Report Share Posted August 9, 2011 Today's Paradox: After an unprecedented downgrade of US long term federal debt, sales of US bonds are stronger than usual: The U.S. Treasury had no trouble attracting investors to its auction of $32 billion in three-year notes on Tuesday -- the first bond sale since Standard & Poor’s cut the nation’s credit rating to AA+ from AAA on Friday. are the interest rates higher? Quote Link to comment Share on other sites More sharing options...
Bonam Posted August 9, 2011 Report Share Posted August 9, 2011 Today's Paradox: After an unprecedented downgrade of US long term federal debt, sales of US bonds are stronger than usual: The U.S. Treasury had no trouble attracting investors to its auction of $32 billion in three-year notes on Tuesday -- the first bond sale since Standard & Poor’s cut the nation’s credit rating to AA+ from AAA on Friday. are the interest rates higher? No, they are being driven lower by the high demand for treasuries. In fact, the two year note is down to something ridiculous like 0.28%. The reason people are buying them is they are still seen as a safe haven for money in an environment where other positions like stocks are looking increasingly risky and volatile. Quote Link to comment Share on other sites More sharing options...
bush_cheney2004 Posted August 9, 2011 Report Share Posted August 9, 2011 No, they are being driven lower by the high demand for treasuries. In fact, the two year note is down to something ridiculous like 0.28%. The reason people are buying them is they are still seen as a safe haven for money in an environment where other positions like stocks are looking increasingly risky and volatile. Yes....that is exactly what's happening. Investors are flocking to the only safe haven they can find, even though it has been downgraded. The Fed announced rock bottom interest rates for another TWO YEARS....that sucks! Quote Link to comment Share on other sites More sharing options...
Bonam Posted August 10, 2011 Report Share Posted August 10, 2011 Yes....that is exactly what's happening. Investors are flocking to the only safe haven they can find, even though it has been downgraded. The Fed announced rock bottom interest rates for another TWO YEARS....that sucks! mREITs shot up on that announcement, since their profitability relies on those low rates. I will probably be increasing my stake in a couple of em to capitilize on the double digit dividend payouts. Quote Link to comment Share on other sites More sharing options...
dre Posted August 10, 2011 Report Share Posted August 10, 2011 (edited) Yes....that is exactly what's happening. Investors are flocking to the only safe haven they can find, even though it has been downgraded. The Fed announced rock bottom interest rates for another TWO YEARS....that sucks! A lot of the buying is strategic. Countries like China and other pacific rim nations that run huge trade surpluses with the US have an interest in propping up the dollar whether they think its a safe investment or not. They figure the US is "too big to fail" without bringing down their own economies. And theyre probably right. Edited August 10, 2011 by dre Quote Link to comment Share on other sites More sharing options...
Oleg Bach Posted August 10, 2011 Report Share Posted August 10, 2011 If you suspect the Obama Whitehouse then it just shows you don't know how the Federal Reserve works in the US. Thanks for playing. The "federal" reserve gives the impression that it is something owned by the federals - the people...It is not - It is like a huge private bank account that the common person contributes to but can never draw from - only the un-common are allowed to use the reserve. Quote Link to comment Share on other sites More sharing options...
maple_leafs182 Posted August 10, 2011 Report Share Posted August 10, 2011 The "federal" reserve gives the impression that it is something owned by the federals - the people...It is not - It is like a huge private bank account that the common person contributes to but can never draw from - only the un-common are allowed to use the reserve. I like this quote from Andrew Jackson "Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves." -Andrew Jackson The Dow is getting killed again, can you guys smell QE3? Quote Link to comment Share on other sites More sharing options...
Oleg Bach Posted August 10, 2011 Report Share Posted August 10, 2011 I like this quote from Andrew Jackson "Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves." -Andrew Jackson The Dow is getting killed again, can you guys smell QE3? It's bizzare - I can't stand to even look. The Jackson quote is very old school - most politicans would never be bold enough to tell the truth - In Jacksons time it was not all about getting re-elected--it was about representation and serving the people that elected you. At present - no one would dare call someone and snake and a thief...they would just beg for a thing called transparency...what ever the hell that means? It might mean I will gladly let you see what I want to show you. Quote Link to comment Share on other sites More sharing options...
bush_cheney2004 Posted August 10, 2011 Report Share Posted August 10, 2011 The Dow is getting killed again, can you guys smell QE3? Yes....time for some more bargain hunting at etrade.com. Quote Link to comment Share on other sites More sharing options...
punked Posted August 10, 2011 Report Share Posted August 10, 2011 I like this quote from Andrew Jackson "Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves." -Andrew Jackson The Dow is getting killed again, can you guys smell QE3? Here comes the lets go back to the 1800s and the gold standard again. You never answered my question on the gold standard care to do so? Quote Link to comment Share on other sites More sharing options...
Sir Bandelot Posted August 10, 2011 Report Share Posted August 10, 2011 The Dow is getting killed again, can you guys smell QE3? QE3 was already spent yesterday. They need QE4 now. They have no problem using the peoples tax money to shore up banks and multi-million dollar corporations, to try and strengthen the economy. Meanwhile those who already have money get rich off the downfall... Interesting brand of socialism. Quote Link to comment Share on other sites More sharing options...
Sir Bandelot Posted August 10, 2011 Report Share Posted August 10, 2011 Yes....time for some more bargain hunting at etrade.com. That's right, carve yourself another slice of the Roast Beast. Quote Link to comment Share on other sites More sharing options...
bush_cheney2004 Posted August 10, 2011 Report Share Posted August 10, 2011 .... Meanwhile those who already have money get rich off the downfall... Interesting brand of socialism. It's the Golden Rule....he who has the gold, makes the rules. Besides, the rich pay most of the taxes anyway. Quote Link to comment Share on other sites More sharing options...
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