The end of the EU

[Mr. Crabs]

"America owns it's own debt. The Federal Reserve is the ultimate debt instrument and this is why the USD has such an advantage over the Euro."

"If foreign debt holders were to sell their debt America would pick up the slack"

Saying these things make you a realist? I'd say it makes you a fantasist. But don't worry, you are in good company along with Ben Bernanke, President Obama and Timothy Geithner.

Then, explain how the US Government would service its debt of +$US16 TRILLION if interest rates were to rise.

Thanks.

How about you learn something yourself and explain to me how the Federal Reserve works? Don't you know we set the interest rates? We're the largest debtor, that gives us the most leverage. You're coming across as childish.

Personally I'm glad my perspective is in the company of Ben Bernanke and Obama. I'm alright with Obama.

Back when I was younger I had the same distrust and pessimism in our economy as you do but after I grew up I realized the core of America is strong despite the corruption that surrounds it. I expect other countries experience quiet the opposite.

 

[Mr. Crabs]

It seems to me that this debt thing depends on the point of view of the beholder. American politicians keep banging on about it being essential to reduce debt, at all cost, in much the same way as European politicians do.

As I see it, we all have been living on credit for decades and this has devalued our currencies to the detriment of all of us. When I was in Baltimore, in 1951, the standard wage was $1 per hour but, although the hourly rate has been rising steadily, the price of Saudi Arabian crude has been valued in cents/barril until comparatively recently. This is why the American public has been driving around in gas guzzlers for so many years. Those days are over, though, for all of us, because the Asiatic countries want to drive cars as much as we do.

I believe that the EU has a future but it is not going to be a five minute job. I do not think that the UK's future will be bright if she leaves Europe. This is just a personal opinion, of course, but I would like to know what is going through the minds of American and Asian industrialists who manufacture in the UK so as to have a market on the Continent.

There is so much to say, isn't there? We could on and on but my main theme has been that the UK should have their referendum and make their minds up. The Euro and EU will sink or swim on its own merits.

I would like to see Europe make a looser union in the future, economically at least. I expect that would create more stability in the continent. The way things are set up there it seems one weak country experiencing a major "mishap" can repress the economy of an entire continent.

 

[Pat494]

What a lot of countries need imho is a vetting process whereby wannabee politicians have to be vetted for integrity, competence etc.
and be judged after their term in office. Heavy fines would claw back some public money at least.
Any country with an expanding national debt, rising unemployment etc would be fined.

 

[Splitlink]

I would like to see Europe make a looser union in the future, economically at least. I expect that would create more stability in the continent. The way things are set up there it seems one weak country experiencing a major "mishap" can repress the economy of an entire continent.

I don't want to keep on about the US because, actually, I'm very pro-American as previous posts on other threads would show. Nevertheless, behind the Greek bond fiasco is the arm of Goldman Sachs. So, here we have a greedy country, ie, Greece, being helped along by a major American institution and this is a perfect example of US capitalism worldwide.

The demand for the US$ has to be countered by another major currency because that demand is met by printed money and that means a debased currency. That's been proved over the years. Don't tell me that the pound will do that, please. If we do not want Asiatic financial dominance there is only one answer--a Eurozone currency. if it fails we will see the end of any Western financial muscle. Could the South Americans come up with a strong world traded currency? It's a possibility, one day, but there has to be an answer to the $US.

 

[new_trader]

How about you learn something yourself and explain to me how the Federal Reserve works? Don't you know we set the interest rates? We're the largest debtor, that gives us the most leverage. You're coming across as childish.

Personally I'm glad my perspective is in the company of Ben Bernanke and Obama. I'm alright with Obama.

Back when I was younger I had the same distrust and pessimism in our economy as you do but after I grew up I realized the core of America is strong despite the corruption that surrounds it. I expect other countries experience quiet the opposite.

You haven't answered any of my questions with sound economics. All you are doing is repeating parrot-fashion what your politicians have told you. I can get the same response from the average man in the street yet you are supposedly a savvy trader/investor who has a clue.

The Federal Reserve sets rates Sure, and when people stop buying US treasuries because the interest rates are too low, who will have to buy them? I will repeat my initial question but I don't think I'll get an intelligent answer from you, like a politician you will just keep avoiding it...Where does the FED get the money to buy US treasury debt?

"As emphasised by the economist Avinash Persaud, reserve currencies come and go. "International currencies in the past have included the Chinese Liang and Greek drachma, coined in the fifth century B.C., the silver punch-marked coins of fourth century India, the Roman denari, the Byzantine solidus and Islamic dinar of the middle-ages, the Venetian ducato of the Renaissance, the seventeenth century Dutch guilder and of course, more recently, sterling and the dollar."


All I can say to you Mr.Crabs is "Who is John Galt?"

 

[Splitlink]

...Where does the FED get the money to buy US treasury debt?

It prints it. No one wants to say that and it's been given a high fallutin' name, reduced to two letters----QE---- but that is what they do.

That is what is devaluing all currencies. There is no way that the US can pay for all the the bonds in foreign hands. The whole thing is one big confidence trick. Because of the power of the US everyone has more faith in US dollars than they have in their own so the US had better keep that confidence, which is showing a lot of weakness, lately.

The problem for the Chinese, who own the most bonds because of Western love for cheap Chinese junk, is that they know that to unload them will topple the
whole system. It is, in my view, a two-edged sword, because in a war they are capable of unloading the whole lot.

I am not an expert on any of this and it is just what is going through my mind, but I do not think that I am far wrong.

 

[new_trader]

It prints it. No one wants to say that and it's been given a high fallutin' name, reduced to two letters----QE---- but that is what they do.

That is what is devaluing all currencies. There is no way that the US can pay for all the the bonds in foreign hands. The whole thing is one big confidence trick. Because of the power of the US everyone has more faith in US dollars than they have in their own so the US had better keep that confidence, which is showing a lot of weakness, lately.

The problem for the Chinese, who own the most bonds because of Western love for cheap Chinese junk, is that they know that to unload them will topple the
whole system. It is, in my view, a two-edged sword, because in a war they are capable of unloading the whole lot.

I am not an expert on any of this and it is just what is going through my mind, but I do not think that I am far wrong.

I don't think you are far wrong either, at least you aren't living in denial like some people here are. Don't get me wrong, I like the USA, I hate their Central Planners who are destroying the country.

 

[Atilla]

It prints it. No one wants to say that and it's been given a high fallutin' name, reduced to two letters----QE---- but that is what they do.

That is what is devaluing all currencies. There is no way that the US can pay for all the the bonds in foreign hands. The whole thing is one big confidence trick. Because of the power of the US everyone has more faith in US dollars than they have in their own so the US had better keep that confidence, which is showing a lot of weakness, lately.

The problem for the Chinese, who own the most bonds because of Western love for cheap Chinese junk, is that they know that to unload them will topple the
whole system. It is, in my view, a two-edged sword, because in a war they are capable of unloading the whole lot.

I am not an expert on any of this and it is just what is going through my mind, but I do not think that I am far wrong.

This is no different to the valuation of companies in any stock exchange in any part of the world.

Valuation is based on expectected potential income. Which company is ever valued at current today's disposal prices. None.

So why should the $ be any different.

If the US goes down the pan fighting wars and losing and printing more money that is a different story. If it continues investing in R&D and inventing then the story goes on and on.

People have confidence in the dollar and the US economy.

Do investors have confidence in the Euro or the Yuan or any other currency as much?


You judge

 

[new_trader]

Some people simply don’t understand basic economics! Only people without a single brain cell between their ears would continue buying shares in a company that has to fund itself by issuing new shares every month in the hope that it comes up with a new idea...The company doesn’t slash costs or remain within budget...it just keeps spending and spending and issuing new shares to pay for it all....every month...month after month...yes, I’m sure in the mind of a dumbass those shares are worth buying and holding.

 

[Pat494]

There is only method I can think of to stop countries devaluing their own currencies is...............

to have another gold standard. Not a fixed one but a floating one with limits.
Whoever said "the scum float to the top" didn't get it far wrong. What they have done over the last deades beggars belief.

Maybe the losers like Greece will be forced to hold a "firesale ". That would ram home some basic truths imho.

Less bloody than hanging some of the idiots I suppose.

 

[new_trader]

There is only method I can think of to stop countries devaluing their own currencies is...............

to have another gold standard. Not a fixed one but a floating one with limits.
Whoever said "the scum float to the top" didn't get it far wrong. What they have done over the last deades beggars belief.

Maybe the losers like Greece will be forced to hold a "firesale ". That would ram home some basic truths imho.

Less bloody than hanging some of the idiots I suppose.

Actually, You have to change the attitude of the "Something for nothing" culture that is so prevalent in welfare/warfare states like the USA & U.K and across Europe. The average person doesn't think or care or even understand where the things they get from Government come from. They are just willing to vote for whoever promises to give them the most. People don't understand that what they get from Government MUST be taken from someone else. Whether it is done through taxation or inflation, it is the same result. One person gains at the expense of another.

This is the Obama Economy:

Documentary about free-loading welfare queens by Nanci Pelosi's daughter - YouTube

 

[Splitlink]

Pat, unfortunately, the ordinary man always suffers the consequences. That does not matter whether he be a Greek or US citizen.

 

[Pat494]

Pat, unfortunately, the ordinary man always suffers the consequences. That does not matter whether he be a Greek or US citizen.

Just like that man who whistle blowed 2,000 rich Greeks keeping their lolly in a Swiss bank account. They soon shut him up !!

Davos richly entertains the rascals at the top of the pile every year and nothing much happens. It's a conspiracy by the rich and wannabee rich imho.

 

[new_trader]

Just like that man who whistle blowed 2,000 rich Greeks keeping their lolly in a Swiss bank account. They soon shut him up !!

Davos richly entertains the rascals at the top of the pile every year and nothing much happens. It's a conspiracy by the rich and wannabee rich imho.

It isn't a conspiracy, it is in your face rent seeking by the Politically connected.

Rent Seeking: The Concise Encyclopedia of Economics | Library of Economics and Liberty

But dumbasses (You see them here posting about how wonderful fiat money is, which facilitates a Governments ability to hand out money to a privileged class) still think that a Government being able to hand out privileges to whoever they want is a good thing.

 

[Atilla]

Not sure what or why some people get so worked up about simple discussions.

There are many dumbasses out there who strongly feel everyone else is a dumbass but them selves. There are some who even post on this thread too.

The beauty of it is that people if they are bright enough can make money out of demand and supply imbalances in almost anything and everything around us.

There are many companies who issue new shares.

There are many companies who make losses and despite being heavily geared issue new shares.

The differences is that a government is much bigger than any one company and have a longer time frame.

Anyone who believes they understand economics and cannot grasp this point and start issuing dumbass remarks - well what can I say but you decide???

It is a question of perspective, outlook and where ones confidence lies. Invest in rare assets like paintings, art, wine, land whatever you get my gist. Don't hold any dollars.

But pleaaaassseeeeee stop the bleeding hearts fiat currency blurb, for crying out loud - reminding us each time with poohey goohey attitude how remarkably smart you are.

Go somewhere and knock your self out and buy some more gold for goodness sake.

Isn't it about time you counted your coins again or something. :idea:

How old are you by the way?

 

[new_trader]

In one post the mercurial dumbass implies there is no difference between the valuation of a company’s share price and the $US dollar...then in the next post implies Governments are bigger and have a different time frame...one can only presume the clueless moron is saying that the laws of economics are completely different on every time frame. There is no point trying to reason with such an erratic scatterbrain.

On top of all his nonsense, he acts like this is just a simple philosophical "Discussion" as well...my taxes aren't real...inflation isn't real...what goes on in this imbeciles mind????

 

[new_trader]

One more thing, one of the reasons why the US and U.K have such over-indebted, entitlement laden, inefficient, unproductive economies is because of the actions taken by Politicians 50+ years ago who had the same attitude as dumbass. That’s right, Government's do have a long time horizon, their philosophy being “Let’s do whatever it takes to make things good now because it will be long time in the future before we have to deal with the repercussions of our idiotic policies”.

President Reagan (I think) summed it up perfectly when he said: “Everyone voting in favour of abortion has already been born”

Well, all the people getting cheques from the Government now are living off the people who weren’t even born when they voted in favour of such entitlements!

 

[Atilla]

In one post the mercurial dumbass implies there is no difference between the valuation of a company’s share price and the $US dollar...then in the next post implies Governments are bigger and have a different time frame...one can only presume the clueless moron is saying that the laws of economics are completely different on every time frame. There is no point trying to reason with such an erratic scatterbrain.

On top of all his nonsense, he acts like this is just a simple philosophical "Discussion" as well...my taxes aren't real...inflation isn't real...what goes on in this imbeciles mind????

1. I did not imply there is no difference at all. I clearly stated valuations are based on expected potential income flow.

2. In the next sentence, I was trying to make the point that payback period for investments can be different time frames. Eg: Boings new super jet for example.

3. I also made another point that investors are also prepared to put money into loss making highly geared companies if they have confidence in reaping rewards for taking risks in believing in the company outlook etc. No different reasonable response to betting on the US$ no? People who bought Greek bonds in the height of the crises, right now are reaping some fantastic rewards.


Clueless moron, erratic scatter brained imbecile you say!!!

That's real funny

 

[new_trader]

Why do I bother? The dumbass doesn’t even know what the discussion is about FFS! One minute we’re talking about Politics and the economy and now it’s about how Bondholders are reaping rewards at the expense of the poor taxpayers FFS!

I Never once implied... never once... NOT ONCE did I imply that there aren’t politically connected or investment savvy people profiting hugely from idiotic Government policies FFS! I am talking about the TOTAL COST TO SOCIETY...FFS! I’d rather see everybody benefit and profit from well run companies and economies than a few people profit from poorly run economies...FFS!!!

Most poor and middle-class people in society didn’t have access to Greek Bonds, or Collateralised debt obligations let alone understand them, yet it’s these very people who are impoverished by Government policies.

Whenever I try to educate the average person on how they are being impoverished by Government policies who jumps in and tells me to get off my high horse? You guessed it...MERCURIAL SCATTERBRAINED DUMBASS!


Says it's just a simple discussion but he can't stay away, instead he litters it with his usual incomprehensible, scatterbrained drivel...FFS!

 

[Atilla]

Why do I bother? The dumbass doesn’t even know what the discussion is about FFS! One minute we’re talking about Politics and the economy and now it’s about how Bondholders are reaping rewards at the expense of the poor taxpayers FFS!

I Never once implied... never once... NOT ONCE did I imply that there aren’t politically connected or investment savvy people profiting hugely from idiotic Government policies FFS! I am talking about the TOTAL COST TO SOCIETY...FFS! I’d rather see everybody benefit and profit from well run companies and economies than a few people profit from poorly run economies...FFS!!!

Most poor and middle-class people in society didn’t have access to Greek Bonds, or Collateralised debt obligations let alone understand them, yet it’s these very people who are impoverished by Government policies.

Whenever I try to educate the average person on how they are being impoverished by Government policies who jumps in and tells me to get off my high horse? You guessed it...MERCURIAL SCATTERBRAINED DUMBASS!


Says it's just a simple discussion but he can't stay away, instead he litters it with his usual incomprehensible, scatterbrained drivel...FFS!

Keep up the good work NT :cheers:

You still haven't learnt to read properly yet. I didn't say you implied. You said I implied. I merely corrected your comprehension by pointing out that I didn't imply but clearly stated my point. I never said you implied anything. On the contrary its other way round. You capiche???

You into astroids or something with your obsessive repeats of the word Mercurial.

Let me guess you are into reading tarrot cards and palms too.

I don't want you to burst a blood vessel or anything so either way best wishes mate.