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(Fox News)   So it's the Monday after sequester...what happened to all the doom, gloom, mayhem, and despair predicted by the White House? White House: Um, yeah, we might have been exaggerating a little. Still the Republicans' fault, though   (foxnews.com) divider line 261
    More: Obvious, Kentucky Republican, White House, Senate Republican Leader, Kelly Ayotte, wage earners, Gene Sperling, military sciences, Mitch McConnell  
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776 clicks; posted to Politics » on 04 Mar 2013 at 8:01 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-03-04 10:43:57 AM

MattStafford: NateGrey: lol You are kidding right? You never provide evidence. You simply make stupid statements and are called out on it. You are the guy who tried to use an isolated island as an analogy for the Economy? The same guy who tried to equate the US Budget to a Household Budget when even Rush Limbaugh says thats wrong? Absolutely and utterly stupid.

So was I wrong about China not increasing their holdings of Treasuries relative to their past purchases recently?  I can post the graph again that shows their Treasury holdings leveling off again, if that would help.


Please do.

  Am I wrong about China making massive investments in gold over the past few years?  Because I can source that.

Why don't you, then?

  Am I wrong about China making numerous bilateral trade agreements to bypass the dollar?
  Sources on sources on sources for that?


You are not wrong about China making bilateral agreements.  You are wrong about their motives to do so, though.

 What makes you think China will continue to buy large amounts of treasury debt when their actions indicate just the opposite?

Because the Chinese are not stupid and they will continue to buy stable bonds as part of their investment strategy.  For the foreseable future, US Treasury bonds are still a safe investment, and investors worldwide (which includes China) will continue to add them to their investment baskets.
 
2013-03-04 10:44:03 AM

MattStafford: NateGrey: lol You are kidding right? You never provide evidence. You simply make stupid statements and are called out on it. You are the guy who tried to use an isolated island as an analogy for the Economy? The same guy who tried to equate the US Budget to a Household Budget when even Rush Limbaugh says thats wrong? Absolutely and utterly stupid.

So was I wrong about China not increasing their holdings of Treasuries relative to their past purchases recently?  I can post the graph again that shows their Treasury holdings leveling off again, if that would help.  Am I wrong about China making massive investments in gold over the past few years?  Because I can source that.  Am I wrong about China making numerous bilateral trade agreements to bypass the dollar?  Sources on sources on sources for that?  What makes you think China will continue to buy large amounts of treasury debt when their actions indicate just the opposite?


You were wrong and embarrassed when you said that China was buying NO treasuries. Why are you so hung up on China anyway, someone else will step in.

Japan's purchases of U.S. Treasuries helped it overtake China last year as the largest foreign holder of American securities, including equities, asset-backed paper and U.S. government debt, U.S. Treasury Department figures show.


No one is disputing China is slowing down, but your speculation as to why is nonsensical and wrong like everything else you say.

Chinese buying of Treasuries has slowed due to the gradual appreciation in the yuan, with China not needing quite so many Treasuries to keep the currency fixed in place. Link

The good thing is the dumber the things you say, the easier it is for everyone to put your GED in Economics in place.
 
2013-03-04 10:45:01 AM

cameroncrazy1984: A) China enters these agreements to strengthen trade agreements with countries that are not the US.

B) Why would they continue to pin the Yuan to the dollar if they wanted to move away from it?


So are you suggesting that China will continue to convert to USD prior to trading with Australia, despite the fact they recently made an agreement specifically letting them bypass that step?
 
2013-03-04 10:46:50 AM

verbaltoxin: Yeah when say, a central entity raises the prime rate yields can rise, as you apparently don't know, based on what we've seen so far.


The Federal Reserve doesn't have complete control over yields, as you seem to suggest.
 
2013-03-04 10:47:31 AM

cameroncrazy1984: Please show us when that has happened in the history of ever.


Greece?
 
2013-03-04 10:48:32 AM

SunsetLament: MFK: THERE WOULD BE NO SEQUESTER IF REPUBLICANS HADN'T HELD AMERICA'S CREDIT HOSTAGE IN THE SUMMER OF 2011 OBAMA HADN'T SUGGESTED IT.


why did he suggest it? what was it in response to?

go ahead. i'll wait.
 
2013-03-04 10:48:37 AM

MattStafford: cameroncrazy1984: Please show us when that has happened in the history of ever.

Greece?


Greece sells US bonds? No wonder their economy is so farked, they're not even servicing their own debt!
 
2013-03-04 10:49:09 AM

NateGrey: someone else will step in.


Who?
 
2013-03-04 10:49:39 AM

MattStafford: cameroncrazy1984: A) China enters these agreements to strengthen trade agreements with countries that are not the US.

B) Why would they continue to pin the Yuan to the dollar if they wanted to move away from it?

So are you suggesting that China will continue to convert to USD prior to trading with Australia, despite the fact they recently made an agreement specifically letting them bypass that step?


Does China suddenly not buy oil anymore? Or did the $AUS suddenly become the petrodollar when I wasn't looking.
 
2013-03-04 10:50:10 AM

MattStafford: verbaltoxin: But...they haven't. So you're point is, as usual, "But bond yields!"

All your statements rely on "if" and yet you can't be bothered to predict anything.

I've made a ton of predictions - I'm only refusing to predict a time frame.  You're making the argument that bond yields will stay historically low in the near future.  I'm making the argument that they will not.

The reasons I believe bond yields will increase in the near future:  Central banks have been moving en masse to gold.  Our largest purchaser of treasuries, the SSTF, will no longer be increasing their holdings.  Our largest foreign purchaser of treasuries, China, will no longer be increasing their holdings.  Several of our other large foreign purchasers, particularly Europe and Japan, are not in position to increase their Treasury holdings.  The Federal Reserve is already monetizing a great deal of Treasuries in order to keep their yields down.

This all indicates to me that there will be a serious drop in demand for Treasuries in the near future, and the Federal Reserve will try to monetize the Treasuries to keep yields low.  This is obviously an unsustainable and short sighted practice.

So that is my argument - what is your argument about why yields will stay low in the future?  Who will be buying the bonds?


Hey look who's pretending I argued things I didn't! I didn't say yields would stay low in the future. I made no prediction whatsoever. I pointed out what is ACTUALLY HAPPENING. It's also known as "reality."

Quanlify "serious drop." Point out what that actually means. Look at what's actually happening around us. Look at real, macroeconomic indicators. Not the stuff you keep pretending.

Your argument on its face says, "DUH." Of course yields will rise, because demand will drop. I've already pointed out WHY to you a dozen times already. The "why" is what counts. You don't seem to understand it's not 2007 anymore. Unemployment is lower and tax revenue will grow this year. The US government, once it un-f*cks this sequester mess, is on track to pay down more debt in the near future. We're very slowly recovering. So what does that do to bond prices, Matthew? What happens when demand drops on bonds?What happens to the yields? What happens when a government has more revenue to pay down debt? Come on, you've only predicted it and I've only explained it numerous times now, what does that actually mean?
 
2013-03-04 10:50:22 AM

cameroncrazy1984: MattStafford: I'm talking about the relationship between the strength of an economy and bond yields.  You are acting as though the only possible way for yields to rise is if the economy gets stronger - this is not the case.  Yields can rise because an economy is weak as well.

Please show us when that has happened in the history of ever.


cameroncrazy1984: MattStafford: cameroncrazy1984: Please show us when that has happened in the history of ever.

Greece?

Greece sells US bonds? No wonder their economy is so farked, they're not even servicing their own debt!


Its almost like you moved the goal posts on that one.  Greece is an economy whose rates dramatically increased due to perceived weakness in their economy.
 
2013-03-04 10:51:35 AM

MattStafford: cameroncrazy1984: http://www.ehow.com/about_6828637_prime-interest-rate-effect-bonds.h tm l

Sorry, it appears that your economics degree missed this little tidbit.

Its almost like you didn't read my post.  The Federal Reserve can print money and buy Treasuries, but in that capacity they are acting as a market participant - and buying new debt with freshly printed currency is an extremely dangerous practice, which, if continued, will surely lead to disaster.


You really believe this, don't you. Like, 100% think that this is completely true.

Again, please let me know where you got your economics degree from so that I can make sure I never accidentally take a class from that university. Because whatever you paid, it was too much.

Then go back to being a terrible quarterback.
 
2013-03-04 10:52:12 AM

cameroncrazy1984: Does China suddenly not buy oil anymore? Or did the $AUS suddenly become the petrodollar when I wasn't looking.


China has bilateral trade agreements with Russia (second largest oil producer) that bypass the dollar.  China has bilateral agreements with Iran (fourth largest oil producer) to bypass the dollar.  The world is shifting away from the dollar, and you are just willfully ignoring the evidence showing it.
 
2013-03-04 10:53:22 AM

FlashHarry: once again:

THERE WOULD BE NO SEQUESTER IF REPUBLICANS HADN'T HELD AMERICA'S CREDIT HOSTAGE IN THE SUMMER OF 2011.


There would be no sequester if Obama had used his supermajority properly and forced a budget resolution in his first 2 years in office. But he couldn't be bothered to properly lead then so I don't expect him to now.
 
2013-03-04 10:53:36 AM
static2.businessinsider.com
 
2013-03-04 10:54:43 AM

MattStafford: cameroncrazy1984: MattStafford: I'm talking about the relationship between the strength of an economy and bond yields.  You are acting as though the only possible way for yields to rise is if the economy gets stronger - this is not the case.  Yields can rise because an economy is weak as well.

Please show us when that has happened in the history of ever.

cameroncrazy1984: MattStafford: cameroncrazy1984: Please show us when that has happened in the history of ever.

Greece?

Greece sells US bonds? No wonder their economy is so farked, they're not even servicing their own debt!

Its almost like you moved the goal posts on that one.  Greece is an economy whose rates dramatically increased due to perceived weakness in their economy.


Oh, forgive me for assuming you'd want to be intellectually consistent for once. Greece's debt is a completely different animal from US debt due to several factors but most notably that the world reserve currency is the US dollar.
 
2013-03-04 10:55:32 AM
Austrian economists:

Predicting economic doom is just around the corner for nearly 50 years.
 
2013-03-04 10:55:45 AM

Big Man On Campus: FlashHarry: once again:

THERE WOULD BE NO SEQUESTER IF REPUBLICANS HADN'T HELD AMERICA'S CREDIT HOSTAGE IN THE SUMMER OF 2011.

There would be no sequester if Obama had used his supermajority properly and forced a budget resolution in his first 2 years in office. But he couldn't be bothered to properly lead then so I don't expect him to now.


HOW DARE THE PRESIDENT NOT DO CONGRESS' JOB!!!
 
2013-03-04 10:56:12 AM

MattStafford: cameroncrazy1984: MattStafford: I'm talking about the relationship between the strength of an economy and bond yields.  You are acting as though the only possible way for yields to rise is if the economy gets stronger - this is not the case.  Yields can rise because an economy is weak as well.

Please show us when that has happened in the history of ever.

cameroncrazy1984: MattStafford: cameroncrazy1984: Please show us when that has happened in the history of ever.

Greece?

Greece sells US bonds? No wonder their economy is so farked, they're not even servicing their own debt!

Its almost like you moved the goal posts on that one.  Greece is an economy whose rates dramatically increased due to perceived weakness in their economy.


Yes Greece is exactly like the US. Do you wonder why people laugh at you?
 
2013-03-04 10:56:52 AM

Big Man On Campus: But he couldn't be bothered to properly lead then so I don't expect him to now.


By properly lead, do you mean alienate the other party entirely and only pay attention to your own agenda? You should have written, "STOP TRYING TO WORK WITH US! ARE YOU INSANE? YOU SHOULD HAVE PUSHED EVERYTHING THROUGH WHEN YOU HAD THE CHANCE!" Next you'll accuse him of trying to be a dictator.
 
2013-03-04 10:57:29 AM

verbaltoxin: WHICH IS WHY GREEK BONDS AREN'T AS RISKY AS US ONES.


What?

verbaltoxin: Hey look, you did it again! Putting words in my mouth. I never said, "Complete control."

But there you are, ignoring, misreading, lying and misdirecting. But it's those other dum-dums that can't read and don't give evidence, right?

I'm done with you. You're not stupid. You're just a f*cking liar. Go f*ck yourself.


Again - you are acting as though the only way yields will ever rise is if the Fed allows those yields to rise.  I've been making the argument they can rise due to actions from actors outside of our government, and it seems to me like you are just arguing that that is impossible.
 
2013-03-04 10:59:58 AM

Fart_Machine: LyingPieceofSh*t: cameroncrazy1984: LyingF*ckingTurdBlossom: I'm talking about the relationship between the strength of an economy and bond yields.  You are acting as though the only possible way for yields to rise is if the economy gets stronger - this is not the case.  Yields can rise because an economy is weak as well.

Please show us when that has happened in the history of ever.

cameroncrazy1984: TrollingF*ckingAsshole: cameroncrazy1984: Please show us when that has happened in the history of ever.

Greece?

Greece sells US bonds? No wonder their economy is so farked, they're not even servicing their own debt!

Its almost like you moved the goal posts on that one.  Greece is an economy whose rates dramatically increased due to perceived weakness in their economy.

Yes Greece is exactly like the US. Do you wonder why people laugh at you?


His answers are on the level of "not even wrong." They're so bad, so false and so stupid they don't even qualify as wrong. He has to actually understand what he's talking about to even be wrong.
 
2013-03-04 11:03:27 AM

Big Man On Campus: There would be no sequester if Obama had used his supermajority properly and forced a budget resolution in his first 2 years in office. But he couldn't be bothered to properly lead then so I don't expect him to now.


yes, it's true; he made the mistake of trying to reason with republicans. he knows better now.
 
2013-03-04 11:03:51 AM

Big Man On Campus: FlashHarry: once again:

THERE WOULD BE NO SEQUESTER IF REPUBLICANS HADN'T HELD AMERICA'S CREDIT HOSTAGE IN THE SUMMER OF 2011.

There would be no sequester if Obama had used his supermajority properly and forced a budget resolution in his first 2 years in office. But he couldn't be bothered to properly lead then so I don't expect him to now.


Please remind us how long Obama had a "supermajority". Also please remind us how we could know at that time that the Republicans would commit economic treason in 2011, and why failure to account for that is the Democrats' fault. And, y'know, since recovering from recession requires short-term deficits, and thus the debt ceiling was going to have to be raised anyway, what you seem to be saying is that had Democrats run roughshod over Republicans (and I thank you for your admission that they did not), Republicans would have either been less likely to commit economic treason upon taking the slightest bit of power, or they would've continued to be a non-entity in Congress.

In other words, what you're saying is that we can only have nice things if Republicans are reduced to the most inconsequential minority in Congress possible.
I thank you and agree with your conclusions.
 
2013-03-04 11:03:54 AM

MattStafford: NateGrey: Is that what it is? You have trouble reading more than one line? You are a lost cause, I dont see why you need to lie about your education. From your writing it is very apparent. Back to ridiculing.

Japan, with their 230% debt to GDP ratio, is going to be buying our treasuries in significant enough quantities to keep yields down?


My question is what rule says the demand would have to be filled by any one single entity.

It's not really a question. It's more a pointing-out of yet another breathtaking idiocy.
 
2013-03-04 11:08:12 AM

Big Man On Campus: FlashHarry: once again:

THERE WOULD BE NO SEQUESTER IF REPUBLICANS HADN'T HELD AMERICA'S CREDIT HOSTAGE IN THE SUMMER OF 2011.

There would be no sequester if Obama had used his supermajority properly and forced a budget resolution in his first 2 years in office. But he couldn't be bothered to properly lead then so I don't expect him to now.


Obama did not have a supermajority in his first two years. Democrats had a bare supermajority for six months in 2009. They managed to do it that year because the Senate's budget resolution cannot be filibustered if it is identical to the House. Everything else has faced a filibuster fight or differences between the House and Senate versions, which caused a fight. In 2010 the House and Senate effectively passed a resolution by using several piecemeal resolutions to accomplish the same goal.

So, that addresses the most glaring derp in your statement. The second derp is that we would *still* have a sequester now because it was only put in place because the Republicans held the debt limit hostage, which would have happened with or without a budget resolution.
 
2013-03-04 11:09:51 AM

cameroncrazy1984: My question is what rule says the demand would have to be filled by any one single entity.

It's not really a question. It's more a pointing-out of yet another breathtaking idiocy.


So what entities are out there that will replace China's 100 billion/yr and the Trust Fund's ~100 billion/yr Treasury purchases?  Japan will also be facing a debt crisis shortly, and will have trouble servicing their own debt, let alone buying our debt.  Europe is clearly broken, and only getting worse.
 
2013-03-04 11:11:39 AM

FlashHarry: the sequester


...was proposed by Whitehouse staffer Gene Sperling. I'm not excusing the GOP, but the WH is denying it was their proposal. It was.

I know the GOP are dirtbags, but the WH's lying about the sequester only helps the GOP.

FlashHarry: yes, it's true; he made the mistake of


...not leading his party to a budget resolution when he had a majority in both houses, and democrats were boasting the end of the GOP.
 
2013-03-04 11:13:40 AM

MattStafford: Again - you are acting as though the only way yields will ever rise is if the Fed allows those yields to rise.


Well, they're the ones printing them, so they are the ones chosing what number to put on them.

(You are the one who claimed in THIS thread that the Fed can print money whenever it wants to, so don't come arguing that there may be other factors at play....)
 
2013-03-04 11:13:59 AM

MattStafford: cameroncrazy1984: My question is what rule says the demand would have to be filled by any one single entity.

It's not really a question. It's more a pointing-out of yet another breathtaking idiocy.

So what entities are out there that will replace China's 100 billion/yr and the Trust Fund's ~100 billion/yr Treasury purchases?  Japan will also be facing a debt crisis shortly, and will have trouble servicing their own debt, let alone buying our debt.  Europe is clearly broken, and only getting worse.


Well considering that the majority of our debt is being held by the public, I'd say various other groups. Non-government entities hold over $12T of our current debt. Against that, $200b per year is nothing.
 
2013-03-04 11:18:47 AM

MattStafford: NateGrey: Is that what it is? You have trouble reading more than one line? You are a lost cause, I dont see why you need to lie about your education. From your writing it is very apparent. Back to ridiculing.

Japan, with their 230% debt to GDP ratio, is going to be buying our treasuries in significant enough quantities to keep yields down?


rlv.zcache.com
 
2013-03-04 11:21:06 AM

cameroncrazy1984: Non-government entities hold over $12T of our current debt. Against that, $200b per year is nothing.


You are making the same mistake people who confuse debt and deficit make.  200 billion might not be a lot compared to 12 trillion, but it is certainly a significant portion of the trillion dollar deficits we are currently running.
 
2013-03-04 11:21:53 AM

NateGrey: rlv.zcache.com


So was that a yes?  Or a refusal to answer the question?
 
2013-03-04 11:22:09 AM

MattStafford: lordjupiter: Not sure if troll or just unaware of how stupid, but I've seen enough from you to know it doesn't matter.

The left, in general, advocates Keynesianism, or policy heavily influenced by Keynesianism.  Keynes said in the long run, we're all dead.  Unless I'm missing something here.


You, in general, miss quite a bit.
 
2013-03-04 11:23:43 AM

MattStafford: cameroncrazy1984: Non-government entities hold over $12T of our current debt. Against that, $200b per year is nothing.

You are making the same mistake people who confuse debt and deficit make.  200 billion might not be a lot compared to 12 trillion, but it is certainly a significant portion of the trillion dollar deficits we are currently running.


So those who currently hold a VAST majority of the debt aren't currently buying new debt? What's your evidence for that?
 
2013-03-04 11:26:26 AM
MattStafford:

i.imgur.com
 
2013-03-04 11:26:52 AM

MattStafford: machodonkeywrestler: 1. Bond situation is not even a fraction of Greece's
2. Entitlement programs do not approach the level of Greece
3. USA actually has a GDP comprised of something other than tourism and olive oil
4. You are comparing apples and rocks. The 2 situations are so dissimilar that it's a real stretch to even mention the 2 as a problem of the same order of magnitude. You should really research the actual situation more before you make these baseless comments.

1 - What does that mean?  Are you suggesting that we would be able to afford an increase in bond yields?  I can assure you, we cannot.  A rise in yields to historical averages would be catastrophic.

2 - When you include the DoD as an elaborate jobs program (which is what it is) - our state welfare system is extremely large, and a period of time where it is difficult to finance our borrowing would result in serious cuts, which would ripple through the economy.

3 - The US GDP is 70% consumption, financed to a large extent via debt (both public and private).  The health care industry and the MIC are large components of our GDP, and both would take a severe hit were we unable to continue our current borrowing trends.

4 - The situation in Greece was that they borrowed large amounts of money to build a massive federal government.  They were able to do this because being in the Eurozone (and lying about their deficits) gave them lower rates than they otherwise should have had.  Bond yields went up, and they were no longer able to afford that massive federal government.  The situation in the US that we have borrowed large amounts of money to build a massive federal government.  We were able to do this for a variety of reasons - some artificial, some deserved, which have combined to give us extremely low bond yields (which we still have). The fundamental problem is the same - significant borrowing financed by low interest rates.  When those interest rates increase, problems abound.


Ok, I'm really sick of this shtick. Let's look at this from an economically sound perspective.

1. Bond yields are entirely a product of demand. So long as the majority of buyers accept a lower yield, it won't go up.

2. Demand for bonds is driven by a desire for safe and stable shelter investments.

Given those two underlying premises, in order for demand for us bonds to drop, and thus raise yields, both of the following conditions need to be met:

First, another investment mechanism needs to rise to the stability level of US bonds. Since no other nation is anywhere near being in a position to offer it's own bonds (either due to instability or due to not issuing enough bonds to satisfy demand), we're looking at a bond alternative. The only two seriously floated are gold and mixed currency baskets. Gold has both a supply and a volatility problem, as well as being impractical. Currency baskets both make amassing large reserves more complicated and costly, as well as being largely irrelevant so long as the US maintains economic hegemony and the dollar it's still seen as the standard currency.

Second, the US needs to become seriously destabilized. Not 'omg deficit!' destabilized, but 'omg no one will finance our debt, and interest rates have already risen above inflation' destabilized. Yes, this is circular logic, but it's largely accurate, if a little simplistic. In order for bond yields to rise, bound yields need to have already risen.

We've seen so far that us bonds appear very resistant to yields going up. They actually dropped, IIRC, after our credit reasoning went down, because as bad as it is here, it's still safer than investing in China, the Eurozone, India, and pretty much anywhere else.

So, Matt, tell me what cataclysm is going to make China or the eurozone a safer place for long term investment than the US. Difficulty: every possible alternative has the same underlying structural problems we do, except larger in magnitude.
 
2013-03-04 11:27:22 AM

MusicMakeMyHeadPound: Smirky the Wonder Chimp: Relax, subby.  Teapartygeddon just takes a while to build up steam.

I'm giving it 15 days until, "No one saw this disaster coming!"


15 days...

About one pay check cycle.

I'd say give it a month, but by the 27th the newest brinkmanship from Republicans will have the nation yawning "Again?".
 
2013-03-04 11:27:28 AM

MattStafford: NateGrey: rlv.zcache.com

So was that a yes?  Or a refusal to answer the question?


www.flixya.com
 
2013-03-04 11:28:05 AM

cameroncrazy1984: So those who currently hold a VAST majority of the debt aren't currently buying new debt? What's your evidence for that?


Social Security is now running at a deficit, meaning they won't be buying any new Treasuries.  China has stopped increasing their Treasury holdings.  Both of these are facts.
 
2013-03-04 11:28:21 AM

FlashHarry: SunsetLament: MFK: THERE WOULD BE NO SEQUESTER IF REPUBLICANS HADN'T HELD AMERICA'S CREDIT HOSTAGE IN THE SUMMER OF 2011 OBAMA HADN'T SUGGESTED IT.

why did he suggest it? what was it in response to?

go ahead. i'll wait.


... the country's desire to cut spending?
 
2013-03-04 11:30:15 AM
www.troll.me
 
2013-03-04 11:31:49 AM

Lusiphur: First, another investment mechanism needs to rise to the stability level of US bonds. Since no other nation is anywhere near being in a position to offer it's own bonds (either due to instability or due to not issuing enough bonds to satisfy demand), we're looking at a bond alternative. The only two seriously floated are gold and mixed currency baskets. Gold has both a supply and a volatility problem, as well as being impractical. Currency baskets both make amassing large reserves more complicated and costly, as well as being largely irrelevant so long as the US maintains economic hegemony and the dollar it's still seen as the standard currency.


Then certainly you would find it interesting all of the recent investment in gold by central banks?  China is buying record amounts.  Countries are verifying their reserves held in other countries.  I doubt there would be this much interest in gold if there weren't questions about the stability of the dollar.

Lusiphur: Second, the US needs to become seriously destabilized. Not 'omg deficit!' destabilized, but 'omg no one will finance our debt, and interest rates have already risen above inflation' destabilized. Yes, this is circular logic, but it's largely accurate, if a little simplistic. In order for bond yields to rise, bound yields need to have already risen.


The Federal Reserve is already monetizing our Treasuries in order to keep yields low.  Do you believe that is a sustainable practice?

Lusiphur: So, Matt, tell me what cataclysm is going to make China or the eurozone a safer place for long term investment than the US. Difficulty: every possible alternative has the same underlying structural problems we do, except larger in magnitude.


Everywhere has massive problems - globalization is a biatch.  But again, I would point to the massive gold purchases by central banks to see where we are headed.
 
2013-03-04 11:32:12 AM

MattStafford: cameroncrazy1984: So those who currently hold a VAST majority of the debt aren't currently buying new debt? What's your evidence for that?

Social Security is now running at a deficit, meaning they won't be buying any new Treasuries.  China has stopped increasing their Treasury holdings.  Both of these are facts.


http://www.chinadaily.com.cn/china/2013-01/18/content_16135181.htm

This article from a month and a half ago says that you are either an idiot or lying. Either way, i hope you don't actually invest, because i really don't feel like supporting you with food stamps when you loose everything.
 
2013-03-04 11:33:23 AM

MattStafford: cameroncrazy1984: MattStafford: I'm talking about the relationship between the strength of an economy and bond yields.  You are acting as though the only possible way for yields to rise is if the economy gets stronger - this is not the case.  Yields can rise because an economy is weak as well.

Please show us when that has happened in the history of ever.

cameroncrazy1984: MattStafford: cameroncrazy1984: Please show us when that has happened in the history of ever.

Greece?

Greece sells US bonds? No wonder their economy is so farked, they're not even servicing their own debt!

Its almost like you moved the goal posts on that one.  Greece is an economy whose rates dramatically increased due to perceived weakness in their economy.


 Greece's rates increased dramatically because they took advantage of their participation in the Eurozone to sell tremendous amounts of debt backed by the strength of the Euro despite the fact that the Greek economy couldn't support it.  When that debt began to default and Greece's banks collapsed, the Greeks could not rescue them without coordination from other EU partners unless they chose to exit the Euro (which would have been a catastrophe of its own accord).

In short, the fact that the EU uses a central currency without a central government creates a serious problem of moral hazard for those member states with weaker economies.  The US does not have that problem because our central bank and Federal government work in concert.   Rates will go up, certainly, but not in the dramatic fashion you suggest.
 
2013-03-04 11:35:10 AM

MattStafford: Lusiphur: First, another investment mechanism needs to rise to the stability level of US bonds. Since no other nation is anywhere near being in a position to offer it's own bonds (either due to instability or due to not issuing enough bonds to satisfy demand), we're looking at a bond alternative. The only two seriously floated are gold and mixed currency baskets. Gold has both a supply and a volatility problem, as well as being impractical. Currency baskets both make amassing large reserves more complicated and costly, as well as being largely irrelevant so long as the US maintains economic hegemony and the dollar it's still seen as the standard currency.

Then certainly you would find it interesting all of the recent investment in gold by central banks?  China is buying record amounts.  Countries are verifying their reserves held in other countries.  I doubt there would be this much interest in gold if there weren't questions about the stability of the dollar.

Lusiphur: Second, the US needs to become seriously destabilized. Not 'omg deficit!' destabilized, but 'omg no one will finance our debt, and interest rates have already risen above inflation' destabilized. Yes, this is circular logic, but it's largely accurate, if a little simplistic. In order for bond yields to rise, bound yields need to have already risen.

The Federal Reserve is already monetizing our Treasuries in order to keep yields low.  Do you believe that is a sustainable practice?

Lusiphur: So, Matt, tell me what cataclysm is going to make China or the eurozone a safer place for long term investment than the US. Difficulty: every possible alternative has the same underlying structural problems we do, except larger in magnitude.

Everywhere has massive problems - globalization is a biatch.  But again, I would point to the massive gold purchases by central banks to see where we are headed.


Gold process have flattened. Large scale institutional buying would raise process significantly. Why are gold process not soaring higher?

At this point, i have to conclude that you are intentional making shiat up. No one can be that stupid.
 
2013-03-04 11:35:16 AM
What China not increasing their holdings might look like:

China remains the largest foreign creditor of the United States after it increased its holdings of US treasury bonds by $19.7 billion in December, data released by the US Treasury Department showed on Friday.
Link

China loves the US dollar again as America roars back
Jin Zhongxia, head of the central bank's research institute, said America's energy revolution and export revival had shaken up the global landscape and would lead to a stronger dollar over time. "The dollar's global dominance will continue," he said.
Link
 
2013-03-04 11:35:48 AM

Lusiphur: This article from a month and a half ago says that you are either an idiot or lying. Either way, i hope you don't actually invest, because i really don't feel like supporting you with food stamps when you loose everything.


A relatively insignificant increase.  Take a look at their Treasury holdings on a larger time scale.  Sure, they have occasional fluctuations up and down, but their holdings have remained relatively stable - not increasing - over the past few years.
 
2013-03-04 11:36:22 AM
You know what's really, REALLY annoying me about this sequester thing?

I see Righties bashing Obama because of all of the drastic cuts, and then they turn around and bash Obama for "over hyping" the "drastic" cuts. Seriously guys, it's time to pick A position on stuff like this.

And yes, it IS still the GOP's fault. They want to stopp getting the blame assigned to them, they need to denounce this whole "Party of No" thing immediately. Once again, you can't have it both ways. You want to be obstructionists? Fine, but you can't whine when people call you obstructionists...
 
2013-03-04 11:38:52 AM

Mikey1969: I see Righties bashing Obama because of all of the drastic cuts, and then they turn around and bash Obama for "over hyping" the "drastic" cuts.


The GOP's Smartly Incoherent Messaging on Spending Cuts
 
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