Who owns America? - nice article

by Marathadi-Saamiyaar Sun Jul 24, 2011 7:43 pm

China and Japan together own just 15% of the Debt while the US Govt. itself AND the Social Security trust funds own 30% of America. There lies the difference between American debt and the Greek, spanish debts. Indian govt and chinese govts have almost 30% "domestic" debt which eats much of the budget through interests. In the case of america there is no domestic and foreign debt -as its currency is universal. So in a way, foreign have a bigger debt problem as they have 2 kinds of debts - domestic (in local currency) and foreign debt (in dollars and Euros).

So to assume the market will tank automatically is not quite accurate.

Intersting - there are other informative articles as well.

by charvaka Sun Jul 24, 2011 8:05 pm

Marathadi-Saamiyaar wrote:So to assume the market will tank automatically is not quite accurate.

Let us wait and see at 9:30 am Eastern tomorrow. After all, it is not just the underlying details that matter -- sentiment IMO will be very negative to the lack of a deal, and sentiment can drive the market down as well as any real problems.

by Guest Sun Jul 24, 2011 8:06 pm

Thank goodness it is not China.

by Marathadi-Saamiyaar Sun Jul 24, 2011 9:04 pm

charvaka wrote:
Marathadi-Saamiyaar wrote:So to assume the market will tank automatically is not quite accurate.
Let us wait and see at 9:30 am Eastern tomorrow. After all, it is not just the underlying details that matter -- sentiment IMO will be very negative to the lack of a deal, and sentiment can drive the market down as well as any real problems.

When I read some article and data y'day I fell out of my chair. How can a country in debt by borrowing from itself and raising its own credit and borrowing from its present citizens and promising later.

That is when it hit me about the domestic debt angle. For the US, everything is sort of domestic debt as everything is in Dollars - its own currency.

It almost looks like a super Ponzi scheme - except it is run by the Govt.

by charvaka Sun Jul 24, 2011 9:10 pm

I was listening to a liberal talk radio today. One of the suggestions there was that the Treasury use its constitutional powers to mint money, and use that to spend, bypassing the current system of borrowing money from the Fed by selling Treasury securities to the Federal Reserve and private investors. For instance, the Treasury could print a coin which says "three trillion dollars" on it, and that coin can be handed to the Federal Reserve which in exchange forks over regular cash for spending. That would also be a legal way out of this mess.

Obama should start talking about other options beyond Congressional authorization to extend the debt ceiling. Everybody agrees that the debt ceiling should always be raised when it is about to be breached, and the credit rating of the US should never be compromised. So what's the point of having a ceiling at all? Scrap the bloody thing altogether.

by truthbetold Sun Jul 24, 2011 10:05 pm

[quote="charvaka"]For instance, the Treasury could print a coin which says "three trillion dollars" on it, and that coin can be handed to the Federal Reserve which in exchange forks over regular cash for spending. That would also be a legal way out of this mess.

..... So what's the point of having a ceiling at all? Scrap the bloody thing altogether./quote]

You answered earlier why three trillion dollars coin idea would not work. Investor sentiment is the problem.

Credit ceiling is one of those anachronistic pillars of American political system. It is not needed. No one bothers about it. Some clever politico discovers it and takes a populist stand, since it is a legally there, every one goes through convulsions to resolve the problem.

I was hoping repubs would see some sense and act for the sake of nation. Repub think tank is so partisan now they are allowing the nation to suffer so that, in their calculations, they can improve the odds in 2012 election. It is amazing that it is happening on such a big issue.

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Who owns America? - nice article

Who owns America? - nice article

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Re: Who owns America? - nice article

Re: Who owns America? - nice article

Re: Who owns America? - nice article