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  • U.S. political impasse threatens world?

    Since a good deal of the world's financial system is built on the sanctity of U.S. debt making it about as good as cash in transactions. Isn't the threat of an even temporary default and a lowering of the U.S. bond rating a threat to the world's financial system at this point? In all humility since I am an American I'd think it might mean a disruption of markets and credit globally. My hope is those governing here will realize the worldwide system built on the dollar is through aquiesence and any disruption of payments would end that and send tidal waves through the worldwide economy not scene since the very early 30s globally. Is there any talk of what's happening with the U.S. perhaps not being able to sell bonds?
    Where free unions and collective bargaining are forbidden, freedom is lost.”
    ~Ronald Reagan

  • #2
    This is what happens when you send people to Congress who have no business experience. This is what happens when Congress people pass bills that they have not even read. Make sure your pantry is full.

    I really miss George Bush. At least he made me laugh.
    Don't listen to me, I'm a wack job.

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    • #3
      President Obama nearly bankrupts the country with his out-of-control deficit spending... then demands responsible fiscal leadership from the Republicans.

      :puck:

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      • #4
        Attached Files
        "Only Nixon can go to China." -- Old Vulcan proverb.

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        • #5
          Why Americans aren’t buying the debt-ceiling Armageddon talk

          Washington is trying its hardest to sell Americans on the idea that failure to raise the debt-ceiling will be the end of the world.

          The rest of the country doesn’t seem to be buying the idea.

          Wall Street’s not buying the debt-ceiling Armageddon talk it because they can’t believe Washington would be so stupid. (Or that their lobbyists can’t pry some deal out of their friends.)

          Main Street’s not buying it because for a lot of Americans Armageddon’s already arrived.

          For millions of unemployed who’ve been out of work for more than 99 weeks, Armageddon is here.

          For millions of the unemployed over 50 whose hopes of another job, let alone a comparable one, are gone, Armageddon is here.

          For millions who’ve lost their homes, Armageddon is here.

          It can always get worse, of course. But for those suffering in such difficult circumstances already, there’s no more bandwidth for fear and worry.

          Even for those still employed, the notion of another $1 trillion in taxes/borrowing to solve another crises, is just so much noise.

          They were told that $700 billion in TARP funds would fix things.

          They were told $800 billion in stimulus would fix things.

          They were told $4 billion in cash for clunkers would fix things.

          They were told Obamacare would fix things.

          They were told Quantitative Easing would fix things.

          They were told Quantitative Easing 2 would fix things.

          Now they’re being told that failure to pass a hike in the debt ceiling will make things really bad.

          Maybe that’s why a Rasmussen poll out Thursday found that 55% of voters oppose including tax hikes in a deal to raise the debt ceiling, while only 34% approve of the idea.


          “No one can tell me with certainty that a U.S. default wouldn’t cause catastrophe and wouldn’t severely damage the U.S. or global economy,” JPMorgan Chase’s Jamie Dimon said on his conference call this morning.

          That may very well be true. It probably is true.

          The problem is that nobody can tell Americans with certainty that a U.S. default would cause catastrophe and would severely damage the U.S. or global economy, at least not anybody Americans have any faith in any more.

          A U.S. default would be the greatest avoidable financial calamity in history.

          But if it happens, it wouldn’t be the first avoidable calamity, and it won’t be the last.

          The thing to get really worried about is if the U.S. defaults and the world doesn’t end.
          Why Americans aren’t buying the debt-ceiling Armageddon talk - The Tell - MarketWatch

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          • #6
            Hmmm. Wall street isn't buying it, "because they can't believe Washington would be so stupid" Who, with no strings attached, bailed out Wall street with hundreds of billions of dollars that only the taxpayers have to pay for? Yep. Pretty much the same people that are still calling the shots.
            Removing a single turd from the cesspool doesn't make any difference.

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            • #7
              I refer you to the Greek/European thread lol. We are all in the same boat.

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              • #8
                Originally posted by Roosveltrepub View Post
                Since a good deal of the world's financial system is built on the sanctity of U.S. debt making it about as good as cash in transactions. Isn't the threat of an even temporary default and a lowering of the U.S. bond rating a threat to the world's financial system at this point? In all humility since I am an American I'd think it might mean a disruption of markets and credit globally. My hope is those governing here will realize the worldwide system built on the dollar is through aquiesence and any disruption of payments would end that and send tidal waves through the worldwide economy not scene since the very early 30s globally. Is there any talk of what's happening with the U.S. perhaps not being able to sell bonds?
                It really depends on how much risk ultra-conservative investors are willing to take. There really isn't anything else they can invest in. The Euro can collapse because ultra-conservative investors can take their money and invest it in Treasury Bonds. Lehman Bros can collapse because people can invest dollars in Treasury Bonds. Everything else can collapse, because people can invest in Treasury Bonds. Or alternatively, dollars, which is how recessions occur in the first place (saving dollars means pulling them out of the economy, which means killing the economy). The US Treasury market is just so goddam big. But the flipside of being big is that, if those ultra-conservative investors panic, and go into currencies and commodities, everything will collapse. Everything.

                It could theoretically be fought off by simply printing more money, but...that simply won't happen in a way that's tolerable to anyone, and you probably won't have a financial system left. It would take a very, very determined government, with very, very good policy, with very, very good intuition bordering on precognition, to make a sovereign debt crisis of the US survivable.

                Just one man's opinion, though.
                "The great questions of the day will not be settled by means of speeches and majority decisions but by iron and blood"-Otto Von Bismarck

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                • #9
                  Try this one out? US defaults(which it won't, this time anyway) that weakens the dollar further. Weakened dollar makes some other currency stronger (yuan maybe?).

                  At this time, oil makes the world go round, oil must be purchased with US dollars. Therefore, anyone that wants to buy it, anywhere, must buy dollars to do it, hence one of the many reasons we are a superpower and global economical leader.

                  What happens to the US when we have to buy yuan to buy oil?

                  How would this help out the old ONE WORLD ORDER folks?

                  What happens to the globe when the chicoms are the new superpower?

                  This stuff is horribly obvious if you take the time to give it honest consideration.

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                  • #10
                    Originally posted by Julie View Post
                    President Obama nearly bankrupts the country with his out-of-control deficit spending... then demands responsible fiscal leadership from the Republicans.

                    :puck:
                    While your pal Bush didn't do any better, yet where was your concern than?

                    From 2005 to 2008 the debt increased 2 trillion. Who got the bailouts rolling? Talk about socialism and nationalization in the financial system if I ever saw it. Think all of the politicians have been reading a bit out of Karl Marx.

                    I am simply not trying to compare who did more just pointing out that Bush spent like a drunken sailor also which is pretty contrary to the political right and I am kinda surprised now they show all the outrage. Either way they were inept or involved.
                    sigpic

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                    • #11
                      Originally posted by 7thsfsniper View Post
                      Try this one out? US defaults(which it won't, this time anyway) that weakens the dollar further. Weakened dollar makes some other currency stronger (yuan maybe?).

                      At this time, oil makes the world go round, oil must be purchased with US dollars. Therefore, anyone that wants to buy it, anywhere, must buy dollars to do it, hence one of the many reasons we are a superpower and global economical leader.

                      What happens to the US when we have to buy yuan to buy oil?

                      How would this help out the old ONE WORLD ORDER folks?

                      What happens to the globe when the chicoms are the new superpower?

                      This stuff is horribly obvious if you take the time to give it honest consideration.
                      Obviously Americans benefit with the dollar as a world currency, once that confidence is lost, you will see that disappear as well as countries financing our debt. We went from 30% of GDP closing on 60& in a matter of a few years, how is that bestowing confidence on the global stage, who wants to invest in that type of security, the type of securities that lose value? You won't find many. Its a tough point between a rock, you have countries that have purchased so many of US assets, that they are a bit stuck. Who wants to sell oil on a weak dollar? They will chose a stronger currency. However, I do not think the yuan is the alternative and Europe has her problems. Maybe a new world currency the Chinese have been pitching to the IMF and UN?
                      sigpic

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                      • #12
                        Once upon a time my system was infected by a virus that damaged kernel so bad that it took me two days to try to patch it. After that I had to reinstall the system and do everything from the ground up. I think that this case is similar to this one. Although it will go with severe consequences, for the US, defaulting would be lesser evil out of two evils, for the world it would be bigger evil.

                        In both cases (declaring bankruptcy or extending the debt ceiling)you have a choice between two bad choices and that is the main issue.
                        Last edited by Versus; 15 Jul 11,, 09:52.

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                        • #13
                          Originally posted by 7thsfsniper View Post
                          Try this one out? US defaults(which it won't, this time anyway) that weakens the dollar further. Weakened dollar makes some other currency stronger (yuan maybe?).

                          At this time, oil makes the world go round, oil must be purchased with US dollars. Therefore, anyone that wants to buy it, anywhere, must buy dollars to do it, hence one of the many reasons we are a superpower and global economical leader.

                          What happens to the US when we have to buy yuan to buy oil?

                          How would this help out the old ONE WORLD ORDER folks?

                          What happens to the globe when the chicoms are the new superpower?

                          This stuff is horribly obvious if you take the time to give it honest consideration.
                          Weaker dollar will soar US exports, thus creating jobs.

                          Also, it will make your debt worth less (since it's calculated in US$).

                          Heck, the credit rating will plunge, but if you create jobs at home who cares? You increase tax base and still everything is payable in dollars ;)

                          Is it really that bad? Unless you go abroad for tourism, everything you need you can buy at home.
                          No such thing as a good tax - Churchill

                          To make mistakes is human. To blame someone else for your mistake, is strategic.

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                          • #14
                            Default and get it over!

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                            • #15
                              I agree with you %100 sir.
                              It is called deflation. It is a necessary part of a correctly functioning capitalist economy. It is also a necessary function of globalization. The sooner it is allowed to happen, the better off everyone (the whole world) will be.
                              Don't listen to me, I'm a wack job.

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