two days until US default deadline

donegal__road

Plan B: Central banks getting ready for financial Armageddon.

If US lawmakers don’t reach a budget consensus and raise the debt ceiling by Thursday October 17, the US will become the first Western power to default since Nazi Germany in 1933, and will send markets into uncharted territory.

The rest of the world is bracing itself for what would happen if the bill is rejected, and the US inches closer to defaulting on its debts, which are largely foreign- held in the form of US Treasury Bonds.

Today's budget may not matter in a few days time.

krudler

Is it time for us to crack open each others heads and feast on the goo inside?

zl1whqvjs75cdy

O good, more ****e to **** us over. Think I'll invest all my money in heroin. Everybody loves a bit o smack.

Dermighty

krudler wrote: »

Is it time for us to crack open each others heads and feast on the goo inside?

Yes, it is Kent.

Notorious97

They wont default, id say they are all being stubborn and we will have to listen to the usual 11th hour crap coming out of there!

That being said, id hope for a zombie apocalypse! More fun

Amirani

Not a chance this won't get passed.

Hande hoche!

They will whip something up at the last minute with both Democrats and Republicans taking credit for it.

I am pie

Russia Today. Always always always the place to go for balanced reporting on the US economy.

Hande hoche!

I am pie wrote: »

Russia Today. Always always always the place to go for balanced reporting on the US economy.

Press tv is where it's at.

Seachmall

I am pie wrote: »

Russia Today. Always always always the place to go for balanced reporting on the US economy.

RT's reporting on US affairs is generally more balanced than most US networks.

They've really ruined the two sweetest words in the English language for all of us.

seanie_c

Strangely enough, they do have money for wars overseas.

It's really just a lot of fear mongering.

wp_rathead

I dunno lads, don't underestimate the audacity/stupidity/naivety of the Tea Party members in the GOP
Only hope really is that enough Republicans see sense and basically "Mutiny" and vote with the Democrates against the Republican Speakers wishes

donegal__road

Where is the logic in borrowing more money to pay off your debts by simply raising the amount you can borrow indefinitely. At what point will credit be with held?

Its a bit like saying lend me 20 million dollars but only give me 10 million. Now you owe me 10 million, I owe you 10 million, so we are quits.

zl1whqvjs75cdy

I'm sure some stock traders some where are making a ****ing mint off this. Bastards.

donegal__road

donkeyoaty0099 wrote: »

I'm sure some stock traders some where are making a ****ing mint off this. Bastards.

that's probably what is really going on..

Kippure

donkeyoaty0099

donkeyoaty0099 wrote: »

I'm sure some stock traders some where are making a ****ing mint off this. Bastards.

Go buy stocks yourself then or would ya feel like a bastard if ya did?

Dartz

donegal__road wrote: »

Where is the logic in borrowing more money to pay off your debts by simply raising the amount you can borrow indefinitely. At what point will credit be with held?

Its a bit like saying lend me 20 million dollars but only give me 10 million. Now you owe me 10 million, I owe you 10 million, so we are quits.

US plays something like ****all on its bonds in interest, while inflation is running at a few percent annually.

When the bond matures, it's actual effective value is less than what the bondholder paid for it, since the dollars they're paid back with are worth less than they were when they bought the thing. The US makes a profit on each bond it sells.

seanie_c

donegal__road wrote: »

Where is the logic in borrowing more money to pay off your debts by simply raising the amount you can borrow indefinitely. At what point will credit be with held?

Its a bit like saying lend me 20 million dollars but only give me 10 million. Now you owe me 10 million, I owe you 10 million, so we are quits.

There's a view among some people America borrows money from China but that seems rather silly when you realize America owns the dollar.

Why would the American government need to borrow dollars?
Truth is, they don't.

The real issue here is some wealthy people want to cut spending on medicaid, medicare, food stamp and social security.

The same wealthy people would prefer to hire cheap labor overseas in somewhere like China than give Americans those jobs.

I don't think the same people calling for budget cuts to these social programs have any idea what they're doing.

donkeyoaty0099

donkeyoaty0099 wrote: »

I'm sure some stock traders some where are making a ****ing mint off this. Bastards.

Let's all get into forex!

Days 298

I want them to default just to see what happens. Not getting my hopes up though they always come to an agreement at the last minute.

Cee-Jay-Cee

Of course they'll pass the budget, they will do whatever it takes to ensure they're paid next week and if that means passing something they don't entirely believe in then so be it. Their fat lardy political asses are priority.

donegal__road

Days 298 wrote: »

I want them to default just to see what happens. Not getting my hopes up though they always come to an agreement at the last minute.

like I was saying, I think you take today's budget and put a match to it.

ixoy

CJC999 wrote: »

Of course they'll pass the budget, they will do whatever it takes to ensure they're paid next week and if that means passing something they don't entirely believe in then so be it. Their fat lardy political asses are priority.

But the budget wasn't passed and a significant number of those working for the government aren't getting paid until it is. It just happens that Senators and Congress men will continue to get paid, whether they've passed the budget or not.

The debt ceiling is a different issue but being tied to the budget by strong-arm tactics by a core group of Tea Party extremists.

BabyGorilla

Buffet said they'll take it to the very edge, **** themselves, and then it will pass.

flanzer

seanie_c wrote: »

There's a view among some people America borrows money from China but that seems rather silly when you realize America owns the dollar.

Why would the American government need to borrow dollars?
Truth is, they don't.

The real issue here is some wealthy people want to cut spending on medicaid, medicare, food stamp and social security.

The same wealthy people would prefer to hire cheap labor overseas in somewhere like China than give Americans those jobs.

I don't think the same people calling for budget cuts to these social programs have any idea what they're doing.

Nail on head. You only have to look at Donald Trumps anti-China sentiments, yet has a Donald Trump Signature clothing line that's manufactured in..... you've guessed it..... China

Dempsey

Cant see the US defaulting

Piliger

seanie_c wrote: »

There's a view among some people America borrows money from China but that seems rather silly when you realize America owns the dollar.

Why would the American government need to borrow dollars?
Truth is, they don't.

Wrong.

China owns about 8 percent of publicly held U.S. debt. Of all the holders of U.S. debt China is the third-largest.

KyussBishop

donegal__road wrote: »

Where is the logic in borrowing more money to pay off your debts by simply raising the amount you can borrow indefinitely. At what point will credit be with held?

Its a bit like saying lend me 20 million dollars but only give me 10 million. Now you owe me 10 million, I owe you 10 million, so we are quits.

National debt doesn't work like bank debt; the US are giving holders of US dollars, an interest-bearing place to put their money, by buying up bonds (i.e. by the government expanding their debt).
As long as there are people holding US dollars, who have no better place to invest it (interest-rate wise), there will be no shortage of willing buyers of US bonds.

With quantitative easing making banking reserves flush with money, this also assures there is an abundance of money within the banks, and since they aren't lending it out to the economy or investing it (thus not getting much return on it), it means they can snap up bonds eagerly (and it assures low interest rates on the bonds for the US too).

Central bank prints money, creating excess bank reserves (quantitative easing), government borrows printed money from banks (and pays them interest, on top of the money just created for them...), thus expanding national debt.
That's what actually happens, just don't mention cutting out the middleman taking a slice from all of this (banks/finance), or you get barraged with browbeating/trolling from financiers and financiers-to-be, trying to convince everyone this would bring about a financial apocalypse.

donegal__road

cheers KyussBishop, that has put it in plain English.. Im glad I didn't take economics!