The Debt Ceiling

Cinvalo

Cinvalo

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http://www.corruptionofrealmoney.com/education.php

To raise the debt ceiling or not to raise the debt ceiling? U.S. debt ceiling crisis is resurfacing again in October. If you recalled in 2011, the debt ceiling crisis had caused turbulence in the market, DJIA fell 2000 points between July and August. The delay in raising the debt ceiling raised the government cost of borrowing by $1.3 billion in 2011. So what is this debt ceiling? Why is the world focusing on it?
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READ MORE: http://www.corruptionofrealmoney.com/displayfullarticles.php?id=44#.UlfvNVPhc-Y

Haven't write for quite a while. I notice that Debt Ceiling is a hot topic recently. Hope you guys enjoy some of my perspective on it. :)

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Yes the interest rate spike option would destroy real estate the world over ....... But just like in the 70's it is something that just needs to happen to help reset the global economy........Glad I have no mortgage to worry about!
 
Partially right..
There will be no hyperinflation etc......the u.s. are bound up by the chinese holding the debt and they will not let them print forever
You are correct.....interest rates will rise sharply....but house prices may not do what you expect.
A rise in interest rates will make sovereign debt ..ie bonds...collapse in value as they become too risky
capital will flee this market and will find its way into the stockmarket...eventually gold..... and real estate....
It will make no sense....unemployment will be rising....stagflation will be occuring.....yet stockmarket and houses will rise....
It has all got to do with the flow of money out of riskier assets....remember that the bond market is ten times the size of all world stockmarkets...higher interest rates raise the chances of bond defaults.
 
Some are saying the bond market bubble has already started to burst......When are they going to make this mainstream news? And when is it going to start directly effecting the U.S economy?
 
I do not want to be too bullish in gold as behavior finance plays a large role in the short term. But the next bubble that is going to happen is going to be a gold super bubble driven by people lost in faith in this fiat Ponzi scheme based economy. The topic of raising the debt ceiling is only going to resurface again and again as the more debt we use to pay debt, the faster we will reach the next debt ceiling again. This continue until we reach a point where the Fed is the only buyer of the Treasury issues. The loss in faith is going to be brought forth by popping of the debt/dollar/bond/ bubble is going exponential and is unsustainable if you look at the chart.
 
Yes I believe this will happen also.....Each time they raise the debt ceiling the limit will be reached sooner and sooner and they will need more debt to pay the interest off each time so it will be a vicious cycle that just snowballs......The debt charts are already parabolic as it is!
 
bordsilver said:
TheEnd said:
The debt charts are already parabolic as it is!
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Exponentials. Debt charts and such should usually be viewed using a log scale.
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^^^ This.
Exponential charts are visually deceiving and can be farcical, and are usually published as a scare tactic.
 
I remember when people were terrified of the 14 billion $ debt, now it's 16.7 billion $!

And I can't see why it wouldn't reach 20 billion $!
 
TreasureHunter said:
I remember when people were terrified of the 14 billion $ debt, now it's 16.7 billion $!

And I can't see why it wouldn't reach 20 billion $!
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TH, I think you need to add a couple more 00's.

Trillions. :)
 
The level of concern will not be the trillion amount be it 17, 20 or 22...

The interest rates will be of concern if they go from near 0% to 3%, 5% or 6%.. The last figure is the average so I have read in the USA.

My reading for this current crisis is for silver and gold to rise back to pre crisis level...stockmarkets to surge once the debt ceiling is raised and IMO they have no choice if they wish to keep the fiat system going a while longer.

Regards Errol 43
 
TheEnd said:
thatguy said:
TheEnd said:
O.k so they have done a deal until Jan/Feb 2014..... What happens after that I am wondering?
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Really... srsly?!?!
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Yes seriously?
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800px-US_Public_Debt_Ceiling_1981-2010.png

Every President since Herbert Hoover has added to the national debt expressed in absolute dollars. The debt ceiling has been raised 74 times since March 1962,[1] including 18 times under Ronald Reagan, eight times under Bill Clinton, seven times under George W. Bush, and five times under Barack Obama
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..... my bet is the kick the can until the fed is buying 100% of USG debt (currently ~45%)

EDIT

1 word... parabolic...
 
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