U.S. Debt discussion

[Weiser Wonder]

Originally Posted by Tinordi

What a load of crap.

"The U.S. is being extracted through banking, trade and tax."

WTF does that mean? Nothing.

It's someone on their bullypulpit just parroting charged political-economic slogans with absolutely not backing or understanding. Epic Rant? Epic Fail.

Ratigan knows what he's talking about. What he means is the money interests of the United States have bought the government, and the politicians that the money interests have bought do not allow for effective regulation or taxation of corporations. US companies are taking massive tax breaks while not creating jobs, banks received the bailouts with little to no regulation, and the Bush tax cuts are still in effect despite the government's desperate need for revenue.

[Slava]

Hilarious: S&P re-affirms Frances AAA rating. I suppose that pretty much nullifies any credibility they had on the downgrade for the US...

[jammies]

Originally Posted by Slava

Hilarious: S&P re-affirms Frances AAA rating. I suppose that pretty much nullifies any credibility they had on the downgrade for the US...

I must have missed the talk about how France was about to default on their loans because their government was paralyzed between two factions of idiots.

[Slava]

Originally Posted by jammies

I must have missed the talk about how France was about to default on their loans because their government was paralyzed between two factions of idiots.

Did you also miss the part about the banking system being in trouble there and them holding a lot of bad debts from other European countries?

[VladtheImpaler]

Originally Posted by jammies

I must have missed the talk about how France was about to default on their loans because their government was paralyzed between two factions of idiots.

When Italy's and/or Spain's turn comes, France's banks will be obliterated...

[Slava]

Originally Posted by VladtheImpaler

When Italy's and/or Spain's turn comes, France's banks will be obliterated...

Societe Generale was getting destroyed today, to the point where they had to halt trading I think. In a country where your second largest bank is not looking great I find it hard to believe that they can maintain a Triple-A rating.

[afc wimbledon]

Originally Posted by Slava

Societe Generale was getting destroyed today, to the point where they had to halt trading I think. In a country where your second largest bank is not looking great I find it hard to believe that they can maintain a Triple-A rating.

France is actually double A, the third A was lent to them by Germany.

[Cowperson]

Originally Posted by Slava

Hilarious: S&P re-affirms Frances AAA rating. I suppose that pretty much nullifies any credibility they had on the downgrade for the US...

Total French debt - government, corporate and personal - is about 350% of GDP while total American debt - government, corporate and personal - is about 275% of GDP and actually falling.

In no way does it make any sense for France to have a AAA rating and America gets snuffed.

S&P is blowing themselves out of the water, particularly since their American rating change caused big money to run out and buy USA Treasuries in panic.

Cowperson

[yads]

They're not rating total debt. They're rating the government bonds (ie just the federal government). Although I agree that France should not be AAA.

[Daradon]

Originally Posted by Cowperson

Total French debt - government, corporate and personal - is about 350% of GDP while total American debt - government, corporate and personal - is about 275% of GDP and actually falling.

In no way does it make any sense for France to have a AAA rating and America gets snuffed.

S&P is blowing themselves out of the water, particularly since their American rating change caused big money to run out and buy USA Treasuries in panic.

Cowperson

I thanked your quote cause it was good information, bt I did have one question. Is personal (or corporate too I guess) debt usually used in those calculations and conclusions? I thought it was just government debt.

[Calgaryborn]

I don't think America can be compared to any other country. Right now a full 70% of the money American borrows comes from its own Federal Reserve. This should be creating lots of inflation but, little has been produced so far. The lack of consumer spending has kept inflation down but, for how long?

How much money can the Reserve continue to lend before the dollar is damaged beyond repair? If things continue China just might be able to sway the world to an alternate reserve currency. If that happens America would be finished economically for at least a generation.

[Morozee]

Originally Posted by Calgaryborn

Right now a full 70% of the money American borrows comes from its own Federal Reserve.

The Federal Reserve is a private bank with a clever name to make people think it's a government owned and controlled entity. This is what I believe Ratigan was referring to in his rant. The Federal Reserve increases the money supply, which is simply more debt that the US has to pay interest on directly to the Federal Reserve. No one knows where this interest money goes because no one is allowed to look at their books! Robbery.

[HPLovecraft]

I'm not that knowledgeable on the subject, but I feel that what S&P did was more a result of the political situation in the USA than strictly because of the economic state of it.

[Calgaryborn]

Originally Posted by Morozee

The Federal Reserve is a private bank with a clever name to make people think it's a government owned and controlled entity. This is what I believe Ratigan was referring to in his rant. The Federal Reserve increases the money supply, which is simply more debt that the US has to pay interest on directly to the Federal Reserve. No one knows where this interest money goes because no one is allowed to look at their books! Robbery.

But unlike other banks the Federal Reserve can print their own money. Forget where the interest is going; The bigger question is what backs up the dollar and how much can they safely print?

[MarchHare]

Originally Posted by Calgaryborn

But unlike other banks the Federal Reserve can print their own money. Forget where the interest is going; The bigger question is what backs up the dollar and how much can they safely print?

What backs up the dollar: the government saying that it has value. That's how fiat money works. You're not one of those people who rants about returning to the gold standard, are you?

[Calgaryborn]

Originally Posted by HPLovecraft

I'm not that knowledgeable on the subject, but I feel that what S&P did was more a result of the political situation in the USA than strictly because of the economic state of it.

Yah they said as much. They mentioned different "pillars" they look at like the debt level, the GDP, political stability, job market, and politically functionality. The fact that the government can't seem to move meaningfullly to address their debt problem was the last straw.

I guess they noticed that all the proposed cuts were in essence future cuts. Even the proposed December cuts are meaningless as both the Democrats and the Republicans could vote to extend the time the committee has to draft a plan. It's no wonder the Tea party mostly rejected the plan.

[Calgaryborn]

Originally Posted by MarchHare

What backs up the dollar: the government saying that it has value. That's how fiat money works. You're not one of those people who rants about returning to the gold standard, are you?

I don't think they can afford to go to the gold standard right now even if they wanted to. I suppose they might be forced to in the future if the world no longer believes the US dollar has value.

Again the question is: How much can the Fed print before the whole house falls down?

[mikey_the_redneck]

Originally Posted by MarchHare

What backs up the dollar: the government saying that it has value. That's how fiat money works. You're not one of those people who rants about returning to the gold standard, are you?

Fiat money has worked before and it can work again. I think the key is who controls the money supply and that is the Fed right now.

Alan Greenspan has openly said that the Fed operates independently and answers to know one. The international ponzi scheme needs to come to an end.

[Shazam]

Originally Posted by Calgaryborn

I don't think they can afford to go to the gold standard right now even if they wanted to. I suppose they might be forced to in the future if the world no longer believes the US dollar has value.

Again the question is: How much can the Fed print before the whole house falls down?

Eh? Who's printing money? QE doesn't print money.

[Calgaryborn]

Originally Posted by Shazam

Eh? Who's printing money? QE doesn't print money.

No I realize it is just computer magic. In fact I've heard that it would be impossible with current capacity to print the money being spent fast enough.