Who Is Going To Buy The US Debt If

Discussion in 'Politics' started by poncho, Oct 10, 2013.

  1. poncho

    poncho
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    This War Causes China, Russia And The Rest Of The World To Turn On Us?

    As I have written about previously, the U.S. government will borrow about 4 trillion dollars this year.

    Close to a trillion of that is new borrowing, and about three trillion of that is rolling over existing debt.

    If China and other big foreign lenders quit buying our debt and started dumping what they already hold, that would send yields on U.S. Treasuries absolutely soaring.

    And we have already seen bond yields rise dramatically in recent weeks. In fact, on Thursday the yield on 10 year U.S. Treasuries briefly broke the 3 percent barrier.

    So what is going to happen if the yield on 10 year U.S. Treasuries continues to go up? The following are a few consequences of rising bond yields that I have discussed in previous articles...

    -It will cost the federal government more to borrow money.

    -It will cost state and local governments more to borrow money.

    -As bond yields go up, bond values go down. In the end, rising bond yields could end up costing bond investors trillions of dollars.

    -Rising bond yields will cause mortgage rates to skyrocket. In fact, we are already starting to see this happen. This week the average rate on a 30 year mortgage hit 4.57 percent.

    -Higher interest rates will mean a slowdown in economic activity at a time when we definitely cannot afford it.

    -As economic activity slows down, that will be very bad for stocks. When the next great stock market crash happens (and it is coming), equity investors could end up losing trillions of dollars of wealth.

    -Of course the biggest threat of all is the 441 trillion dollar interest rate derivatives time bomb that is sitting out there. Rapidly rising interest rates could potentially bring down several of our "too big to fail" banks in rapid succession and throw us into the greatest financial crisis the nation has ever seen.

    Are you starting to get the picture?

    CONTINUE . . .

    At present, the global financial system is centered on the U.S. dollar. Countries from around the world keep huge reserves of our currency lying around for the sake of international trade. This reserve currency status that the dollar possesses allows the U.S. to sustain an assertive foreign policy. If the dollar were to cease being the global reserve currency, the U.S. government will be much weaker internationally. In addition, the country will have a much harder time financing our debt, leading an already difficult to manage debt impossible to maintain and collapsing our economy.

    It is important to note that China is not a capitalist nation. Capitalist nations have thriving open markets and numerous freedoms such as an open internet.

    The people of China do not have the luxury of capitalism; they have a repressive communist government interested in power.

    CONTINUE . . .

    Along with exposing widespread international surveillance, Edward Snowden has revealed how exactly the US is financing its military ambitions, according to Max Keiser.

    < snip >

    Max Keiser: The American economy runs on the confidence, confidence that the world accepts the US dollar as world reserve currency, confidence that the US bond market will remain the standard. And what we are seeing is a sell-off in a bond market and a sell-off in the stock market, because confidence in the US and its ability to maintain a global empire through interest rates and the Central Bank policy is crumbling before the world’s very eyes.

    What’s interesting is that Edward Snowden worked for Booz Allen. Booz Allen allegedly along with a few other companies are the masterminds behind LIBOR market rigging, energy market rigging, FOREX market rigging. And this is really the fuel that keeps the American military empire going, because the American economy itself cannot support its military ambitions so they’ve resorted to market manipulation and the kind of intelligence that Edward Snowden is able to aggregate is key to manipulating markets in ways that make Booz Allen, allegedly, the channel for billions and billions of dollars into America’s military campaigns.

    And this is really about money, markets and manipulations. It’s not about security. It’s not to do with anything that the White House says. Remember, the White House is a puppet of Wall Street, Booz Allen, the hedge funds and the financial interests of the corrupt bankers.

    RT: Can you also give us an idea of how some of those big companies like Google, or Facebook could actually benefit from this surveillance program PRISM? Is there financial a financial gain from them?

    MK: Absolutely, because all of the manipulation involves rigging the indexes. And the indexes are all data-sensitive. So, if you can manipulate the data, you can manipulate the indexes and you manipulate the markets. And if you have advanced knowledge of that inside information you can make billions of dollars of front-running, high-frequency trading, algorithmic trading. And, of course, all the banks on the Wall Street are in on this and all the banks in the UK.

    It’s very telling that the foreign minister of Ecuador said that, look “you are talking about us extraditing Edward Snowden, what about bringing back those bankers we asked you to bring back to Ecuador who we caught rigging and terrorizing our market?” What about the Icelandic bankers that have been asked by the government of Iceland to be extradited back to Iceland that are being held in the UK? What about these other instances where banking terrorists are being sheltered in the US and the UK? They’re not responding to extradition agreements. So this’s all about financial legerdemain, unfortunately, Americans don’t have enough money to fight their wars anymore so they have to resort to snooping, data-gathering, and market manipulation.

    View The Video Here.





     
  2. thisnumbersdisconnected

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    On the contrary, suddenly dumping trillions of dollars in Treasury bills, notes and bond on the open market would send the price of those commodities plunging. Why would they do that to themselves, given they would then get mere pennies on the dollar?

    That's simply incorrect. The rate rose to 2.63 percent, a five-year high, after rising three basis points -- the assumed face value of the notes, not the actual value. For example, three-year 0.875 percent note maturing in September 2016 price fell 3/32, or 94 cents per $1,000 face value, to 100 19/32. At the current rate of increase for basis points, the three percent level won't be reached for nearly 25 years, although an improvement in the economy could greatly speed up that rate of increase.

    Nothing. For one thing, it won't. This was the first auction of U.S. treasury notes since the so-called shutdown, and, as Sean Simko, who oversees $8 billion at SEI Investments Co. (SEIC) in Oaks, Pennsylvania, said: "Demand remains outside the money-market arena for Treasury securities. The market is looking to the figureheads in government to provide clarity and direction on which way this is going."

    Additionally, the size of Tuesday's three-year offering was the smallest since January 2009 and the second consecutive reduction after remaining at $32 billion for 35 sales beginning October 2010. The size peaked at $40 billion from November 2009 through April 2010.

    Three-year notes, overall, have actually lost 0.1 percent this year, compared with a decline of 2.5 percent by Treasuries overall, according to Bank of America Merrill Lynch indexes. The three-year securities returned 0.6 percent in 2012, while Treasuries overall gained 2.2 percent.

    The reason prices are rising -- and even so, only slightly -- is that offering sizes from the Treasury are less than in the past. It's simple supply/demand economics. More bills on the market, more purchases made despite the lowering of the overall profit made in the market due to the number of units made in the offerings. Less bills on the market, fewer purchases made and an increase in overall yields.

    You seem to have yields and costs confused. You try to come off as being an economics guru but relying on the conspiracy and dooms-day websites means you put out the right information, but reaching the wrong conclusions. Why? Because those websites don't understand the economics of treasuries any more than you do.

    Note: Those of you who wish to reason intelligently can check out my facts on http://www.bloomberg.com/news/2013-...ise-as-investors-seek-default-protection.html
     
    #2 thisnumbersdisconnected, Oct 10, 2013
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  3. poncho

    poncho
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    Since coming here to BB your "theme song" has been you are always right because everyone else is an idiot.

    Yet you fell completely silent right after I posted this . . .

    http://www.baptistboard.com/showthread.php?t=89176&page=2

    Which showed how you swallowed the mainstream corporate propaganda hook line and sinker simply because it lined up with republican (Bill O's) talking points. And now you want everyone else to nibble on the same bait that landed you? Not everyone is as gullible as you are. :smilewinkgrin:
     
    #3 poncho, Oct 10, 2013
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  4. InTheLight

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    Ah yes....divert, distract, distort....classic.

    You did not address anything in his response post. Why don't you stay on topic? You started the thread, rebut what TND said.
     
  5. thisnumbersdisconnected

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    Actually, I posted this in response to your OP in that thread ...

    http://www.baptistboard.com/showthread.php?t=89176&posted=1#post2038531

    ... and you never addressed the fact that the link in that OP was at least three years old, the article was long since archived, and then after that post, you posted something that claimed to be the original article you cited, but provided no link to prove you accurately quoted the article, while ignoring the fact The Wall Street Journal hasn't held to its analysis in the meantime, because circumstances changed dramatically after the article appeared. Therefore, this is absolutely correct:

    And my question is, why didn't you rebut it instead of falsely claiming I acquiesced on a long-since dead discussion? Dead, that is, except for you talking to yourself for three more posts. Like you probably will do here.
     
    #5 thisnumbersdisconnected, Oct 10, 2013
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  6. poncho

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    My first post already took care of that. He responded as expected by dropping the "conspiracy theory" bomb just as you always do. I'm not going to waste my time trying to have a rational discussion with people that act like they know it all and call people names that don't agree with them.

    As far as I'm concerned an un repentant cowardly bushwhacker like you isn't even fit to talk to.
     
    #6 poncho, Oct 10, 2013
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  7. poncho

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    I think people here can see how that thread turned out. I proved you wrong and then you scurried off to another thread to call someone else names. Which is what you seem to do best. I count six sources in my posts and you only addressed one by using the excuse that you couldn't open the link to "verify" if I was being honest.

    I'm not ITL I have no reason to lie.

    That's five articles you ignored. And they all proved you wrong. My thinking is that's why you ignored them and disappeared from the thread with your tail between your legs.
     
    #7 poncho, Oct 10, 2013
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  8. thisnumbersdisconnected

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    You should be forced to wear this shirt when logging on to BB.

    [​IMG]

    You proved nothing by talking to yourself for three more posts. Your next post after that was the aforementioned posting of an unattributed analysis you said was from the WSJ. You then quoted, out of context, three bullet points from the Washington Post but the whole article didn't support your OP, because the Post also cited Frank's interference in government regulations leading to the housing crash. Then, finally, you posted several links from liberally biased media -- why would a conservative trust the words of a liberal rag? -- to again attempt to prove your point. You failed. Epically.

    The fact of the matter is, your OP was wrong, your attempts to support the OP were completely erroneous, and the truth about the whole thread was that you were attempting to discredit the view -- the truth -- that it was not government regulation, but a relaxing of government regulation -- undertaken by the Democrats -- that led to the housing crash.

    But live on in your own dream world and believe you've proven somebody wrong if it makes you feel better. The rest of us will live in reality.
     
  9. poncho

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    It wasn't me that proved you wrong. It was Business Insider, Forbes, NYT, Washington Post, CBS and the WSJ.

    You know all those "conspiracy sites" as you call any source that disagrees with your partisan narratives.

    I found this telling. You seem to be in agreement with this "conspiracy site" because it follows your partisan narratives against democrats and Obama. In that case "conspiracy sites" are okay in your book, right?

    There used to be a dude here named Pator Larry he was a very arrogant know it all type and real big on consistency. You sound alot like him accept that the only thing you are consistent in is lining up with any source including what you call "conspiracy sites" that agrees with your "reality" and railing against those that do not because they are in your opinion "conspiracy sites".

    That's very telling imho.
     
    #9 poncho, Oct 10, 2013
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  10. thisnumbersdisconnected

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    Forbes, you said?

    Forbes? Really?


    Your failure to deal with reality is nothing short of amazing. Of course all those other sources deny Frank had anything to do with it, even though Frank himself admits it was his fault. It is their objective in life --even the pseudo-conservative Business Insider, which has also been caught stealing content from "forbes.com" -- to promote the liberal agenda, meaning they can never report the wrongdoing of any liberal.

    Frank has a huge advantage over you. He at least admitted he was wrong. You can't.
     
    #10 thisnumbersdisconnected, Oct 10, 2013
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  11. Crabtownboy

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    I believe you meant "would cause Chins, Russia ................" and that is correct. Surely they would turn on us. I do not know if they would go to war, but we no longer be able to run a foreign policy anything like we now have. We would have little or no influence. We would be completely untrustworthy in the eyes of others. The current shutdown of the government has raised questions about our being trustworthy.



    The US would be forced to default on its loans. The US and the world would be thrown into a depression that would make the crash of 1929 look like child's play.

    You are correct.

    You are correct.

    You are correct.

    You are correct.


    You are correct.

    You are correct.

    You are correct.


    I doubt some are as what you are saying, while true, does not fit what they want to believe.

    You are correct.







    You are correct.
     
  12. InTheLight

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    Ladies and Gentlemen, the lesson from Poncho is: "Do as I say, not as I do..."
     
  13. InTheLight

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    Actually, no. If foreign lenders quit buying our debt that would truly be a problem. However, this idea that China is going to start dumping what they already hold doesn't hold much water.

    1.) China would have to find buyers for the US debt that they currently hold. It's possible that our allies and other countries would buy it but it's unlikely. In any event they hold so much of it they could never find enough buyers. They are basically stuck with it.

    2.) The debt that we have issued has maturity dates of weeks, months, six months, 1 year, 10 years, etc. Who would want to buy a US debt security that matures in 22 months that is paying 1.35% say, when they could be buying bonds with a 2.5% interest rate?

    3.) If China were to sell their U.S. debt to other countries, why would we default on it? We'd simply pay the new owners the interest we previously had been paying to China.


    All of these are moot points because the original statement presumes that China and other foreign lenders have QUIT BUYING U.S. DEBT, so why would they buy US debt from China?
     
  14. Crabtownboy

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    That is truly a funny remark. Thanks for such a good laugh. :laugh::laugh:
     
  15. poncho

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    I never set the example of being a cowardly bushwhacker. No one on this board has other than you. What an honor that must be for you. The one and only poster to ever resort to such a cowardly and dishonest tactic of stalking and personally attacking a person on your ignore list for months for fun.

    Your excuse? "It's okay because there's no specific rule against it".

    No one followed your example did they? Nope, not one person and you tried boy did you try. Everyone else here has at least some integrity. You're the only one here totally devoid of that attribute.

    Far as I am concerned you aren't even worth talking to anymore. :wavey:
     
    #15 poncho, Oct 10, 2013
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  16. thisnumbersdisconnected

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    If he'd bothered to actually find out anything about the subject in his OP, he'd have seen that that "yield increase" he is so alarmed about was triggered by the sale of bonds, notes and bills Tuesday, fully one-third of which were bought by foreign investors. But if he'd pointed that out, it would have defeated both his arguments, so I can see why he didn't bother to learn anything.

    :thumbsup:
     
  17. poncho

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    It's not funny because it's true Crabby.

    It's sad that we have to put up with such cowardly low lifes like ITL. I've been here since 2004 and have seen much better people than him get banned for way less than what he did.
     
    #17 poncho, Oct 10, 2013
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  18. Crabtownboy

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    Poncho, what was funny was you said you were not going to waste your time on people that call people names that do not agree with them..............

    Then in the same post in the next paragraph you call names.

    That is what was, at least to me, funny.


    Hmmmmmmmmmmmm, trying to remember, have you called me names?
     
  19. poncho

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    Yes. I've called you Crabby.

    I call ITL a low life lying cowardly bushwhacker because that's what he is. He earned it fair and square.

    Then along comes TND here and started calling me names his very first posts on this board and ordered me to leave! Ordered me! :laugh:

    Like who does he think he is that he can come here and start ordering people that have been here for years to leave?

    What arrogance.


    He calls me a "conspiracy theorist" and all my sources are "conspiracy sites". So I started posting threads putting Obama and the democrats in a bad light form the very same "conspiracy sites" he's always putting down and guess what?

    When they're bashing Obama they're okay. That tells me he's about one thing and one thing only. His team. He couldn't care less if this country went to hell in a hand basket just so long as his team could be the one doing the steering.

    And the liberals here are no better. "We're winning and that's all that matters." Really? Losing your freedom and being treated like cattle is winning?

    Then you all try to blame each other for the mess we're in.

    I think you've all gone insane. We're in this mess because we have a lawless government and people that only know how to take sides in it's lawlessness.
     
    #19 poncho, Oct 10, 2013
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