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US debt ceiling

brogdale said:
The global asset funds will lend to states all the while they are confident that the debt can be serviced; simple as. Countries with governments that have replaced tax burden with public debt are literally living below their means.
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As those whom pick up the IOUs become less confident the interest rate on new debt goes up. Route they are taking hurts both the have not and the as yet unborn in favour of those holding tangible assets. More over because the majority of the world's trade is conducted in $ UK EU Turkey, Australia etc (the list goes on) can't get a handle on the inflationary problems in their economies.
 
gosub said:
Bond auctions.


Fed was a year late in dealing with inflation calling it 'transitory'. Then there was talk of soft landings...there won't be and the markets are carrying on like bank bailouts are a given....where the fuck is moral hazard? And its a feedback loop that kicks off inflation again
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What you've posted has no relevance to the questions I asked. You talked about countries "living beyond their means", but what do you mean by that? How have you determined what these "means" are?
 
Had actually come back to expand on other countries with Inflation being stymied by the US approach. Directly if the US prints and they don't, currency rises relative which actually helps with inflation ..except makes exports less competitive which fucks with balance of trade.


It isn't just a Washington posturing game it has global ramifications. And now with debt over 100% of GDP, ain't the given it was on previous occasions (or shouldn't be)
 
gosub said:
Debt 120% of GDP
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This doesn’t follow, for all kinds of reasons.

First, the use of the word “debt” implies an analogy to the kind of debt we are familiar with in our personal lives, but national debt isn’t like that. For a large western economy, like the US, it’s more like a closed system. So “debt” in this context actually just refers to an expansion of the money supply. Expanding the money supply might be good or bad, but you can’t just say that its historic expansion should be limited by some arbitrary referral to GDP.

Second, GDP is an annual measure of output, whereas debt is a static measure of something in total. Why is there a problem with the former being 120% of the latter? Even if you use the terrible household budget analogy, you should know that many people have mortgages worth 4 times their annual income. If 400% is OK for an individual, why is 120% bad for a country?

Third, GDP is a terrible measure of productivity anyway. You can increase GDP by having terrible, inefficient public services that need constant repair. You can increase it by turning a blind eye to black market activities such as corruption. It doesn’t necessarily have anything to do with fiscal revenue, which is what actually services debt.

Fourth, it ignore inflation. Debt of 120% GDP will become debt of 100% of GDP after a few years of inflation at 10%.

That’s all just objections on the grounds of economics, before we even get into any of the actual politics of the situation.
 
www.wsj.com

WSJ News Exclusive | Saudi Arabia Considers Accepting Yuan Instead of Dollars for Chinese Oil Sales

Saudi Arabia is in active talks with Beijing to price its oil sales to China in yuan, people familiar with the matter said, a move that would dent the U.S. dollar’s dominance of the global petroleum market and mark another shift by the world’s top crude exporter toward Asia.
www.wsj.com www.wsj.com

foreignpolicy.com

A BRICS Currency Could Shake the Dollar’s Dominance

De-dollarization’s moment might finally be here.
foreignpolicy.com foreignpolicy.com
 
If the spend was on infrastructure or other things that would magnify GDP that would make sense, if, as it seems to be, is using your credit card to meet the minimum card payment not so much.

That government only has 2 strong levers for managing the ecomy taxes and interest rates if you are in the paying your credit card with credit card you lose control of control of interest rates

Could have some smyphathy with thems trying to decouple their exports. Except China's economy ain't in great shape either (is anybodies) Belt & Road offers worse terms and undermines international bodies (iirc it was the EU side that kept their foot on Greek throats Yanks were talking write off back when..
 
Fine, equally apt given the state of US housing market ...If rates are going lower remortgaging makes sense same debt cheaper to service...if they are going up and you aren't using the refinancing to do anything that will add value don't expect rates to go down


Except the markets are, cos the whole thing is gamed and they expect bail outs on the grounds of NOT being a disaster. AND is a pretty big disaster too. Rock / hard place
 
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gosub said:
That government only has 2 strong levers for managing the ecomy taxes and interest rates if you are in the paying your credit card with credit card you lose control of control of interest rates
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And this shows the underlying politics of your posts - managing the economy. (And even after that only accepting two options)
 
brogdale said:
Blimey; yep that's just legalised corporate theft.
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This is a form of indentured servitude. The nurse in the story I posted had to pay $14,000. Most people couldn't pay that to get free so most would suck it up and keep working for them. To get free, she took out that much in a credit card advance. It's really saying something that you'd rather owe a credit card company than keep working for these people.
 
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markets.businessinsider.com

Here's why the US doesn't have to pay off its $31 trillion debt: Krugman

"When governments for one reason or another run up large debts, it is, as far as I can tell, unusual to pay those debts off," Nobel economist Paul Krugman said.
markets.businessinsider.com

Except we did

www.google.com

Paying the price of war: Britain makes good on historic debts

Debts from bonds issued in 1927 by Winston Churchill going back to the South Sea Bubble, Napoleonic and Crimean wars
www.google.com www.google.com


Debt reaching above 100% is significant if only psychologically. US is also facing its most serious upstart in a long time in the form of China yet carrying on like it's all a formality. Can't see the bond market being too happy
 
gosub said:
markets.businessinsider.com

Here's why the US doesn't have to pay off its $31 trillion debt: Krugman

"When governments for one reason or another run up large debts, it is, as far as I can tell, unusual to pay those debts off," Nobel economist Paul Krugman said.
markets.businessinsider.com

Except we did

www.google.com

Paying the price of war: Britain makes good on historic debts

Debts from bonds issued in 1927 by Winston Churchill going back to the South Sea Bubble, Napoleonic and Crimean wars
www.google.com www.google.com


Debt reaching above 100% is significant if only psychologically. US is also facing its most serious upstart in a long time in the form of China yet carrying on like it's all a formality. Can't see the bond market being too happy
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Why? Has anything happened to justify that statement?
 
Obviously not US debt related, but I thought that those posting on here might be interested to see that total UK public debt has now surpassed the size of UK GDP for the first time in 62 years.

FT link here (copy & paste the title into Google to bust the £-wall).

1687344086447.png

As I said upthread, further evidence of how the tories donors prefer lending to the state rather than paying any tax.
 
brogdale said:
Obviously not US debt related, but I thought that those posting on here might be interested to see that total UK public debt has now surpassed the size of UK GDP for the first time in 62 years.

FT link here (copy & paste the title into Google to bust the £-wall).

View attachment 380161

As I said upthread, further evidence of how the tories donors prefer lending to the state rather than paying any tax.
Click to expand...
The election and actions of Liz Truss PM were the slam dunk on Tory priorities (you are not wrong)

US decision to pause rate rises (it'll come back to bite them) have at least alivated some of the pressure on UK bonds
 
gosub said:
The election and actions of Liz Truss PM were the slam dunk on Tory priorities (you are not wrong)

US decision to pause rate rises (it'll come back to bite them) have at least alivated some of the pressure on UK bonds
Click to expand...
Yeah, but has zero to do with the 1, short-lived Truss administration; this macro-economic aspect of the neoliberal turn has seen the right party of capital intent on facilitating fiscal extractionism on behalf of it's asset manager overlords via increased public debt since their 1990s period in the opposition wilderness. Their actions in government speak for themselves:

1687345969823.png
 
brogdale said:
Yeah, but has zero to do with the 1, short-lived Truss administration; this macro-economic aspect of the neoliberal turn has seen the right party of capital intent on facilitating fiscal extractionism on behalf of it's asset manager overlords via increased public debt since their 1990s period in the opposition wilderness. Their actions in government speak for themselves:

View attachment 380163
Click to expand...
Bonds been wobbling again (like they did under Truss) US not raising rates while everybody else does reduces pressure.

Truss thing...At the end of the day was doing what she said she do. That the majority if the tory membership thought cutting taxes to stimulate growth was an answer to a inflationary cost of living crisis says a lot about them
 
Seems fair enough, really. US debt does need to be seen as a bit less than totally secure, given that the politicians always argue about whether they’re going to honour it or not.
 
kabbes said:
Seems fair enough, really. US debt does need to be seen as a bit less than totally secure, given that the politicians always argue about whether they’re going to honour it or not.
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Agree and very far from 'arbitrary' though coming after BoJ statement last week was unfortunate
 

Brics bank strives to reduce reliance on the dollar

Shanghai-based lender’s president says it can become an institution ‘made by developing countries for themselves’
www.ft.com www.ft.com

www.reuters.com

'BRICS bank' aims to issue first Indian rupee bond by October

The development bank founded by the so-called BRICS countries is planning to issue its first Indian rupee bond by October, its chief operating officer said on Monday, as the lender comes under pressure to raise and lend more in local currencies.
www.reuters.com www.reuters.com

Jackson Hole starts Thurday
 
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