Will the U.S raise the Debt ceiling to 20T like Japan?

T

TheEnd

Well-Known Member
Just been contemplating as I sit and wait for news on what the U.S is going to do with the new debt ceiling problems..... I believe a decision to raise it again may have a negative impact on pm prices for a few years as it is basically like kicking the can 'again.

What worries me is, realistically with the U.S being a bigger economy than Japan, means they have the potential to raise the debt ceiling many more times and push it to say 20T like Japan is presently and possibly even further if Obama has his way.... If this happens it will delay all U.S default scenarios for many years ahead... And it also means pm prices may dramatically fall???
 
They have never not raised the ceiling. Not raising it means budget cuts and tax hikes. Not gonna happen.....
 
So we are all worrying about a U.S default when really it's not going to happen because they won't let it happen then?
 
TheEnd said:
So we are all worrying about a U.S default when really it's not going to happen because they won't let it happen then?
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The US isn't going to default. They'll just inflate their currency away as they are doing now. :)
 
Also, News is saying Obama is having a very hard times passing his new ideas of no debt ceiling at all with congress etc. Damn this stuff is getting heavy!

Does anyone know when the final decisions will be made???
 
TheEnd said:
Also, News is saying Obama is having a very hard times passing his new ideas of no debt ceiling at all with congress etc. Damn this stuff is getting heavy!

Does anyone know when the final decisions will be made???
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I think the decision is made. We'll hear about it when they're good and goddamn ready.
 
There are even easier options - just print 2 platinum coins worth 1 trillion dollars each!!!!!


Under current law, the Treasury is technically allowed to mint as many coins made of platinum as it wants and can assign them whatever value it pleases.

Under this scenario, the U.S. Mint would make a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Fed moves this money into Treasury's accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations for the next two years without needing to issue new debt. The ceiling is no longer an issue.


http://www.washingtonpost.com/busin...dc7956-3fe5-11e2-ae43-cf491b837f7b_story.html
 
I believe a decision to raise it again may have a negative impact on pm prices for a few years as it is basically like kicking the can 'again.
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Trying to understand your stance
Is it that you see PM's as a risk on trade and can kicking takes out that scenario?

What about the currency supply issue
They'll just inflate their currency away as they are doing now.
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the extra dollars chasing same amount of stuff, wouldnt this see higher prices for PM?

Cheers
Alfie
 
No I was just thinking that raising the ceiling again would put off any default situation for a few years.... Therefore it 'may' stop many from buying pm's as a hedge or back up against a deflating system..... It would actually be a good time to stack if prices do go backwards for a few more years.... Plenty of preperation time.
 
The End, I think your thinking is flawed. The reason PM's have been on this ride for the last few years is precisely the debt increases and money printing. Constantly this is devaluing the USD and so gold and silver are being used as a hedge against such inflationary measures.

Also, stop trying to compare Japan and the USA. They are completely different economic scenarios. Japan's debt problem is owed almost entirely to it's own citizens. So their ageing demographic is going to be the single largest contributor to them and their debt issues. Which of course will force the Japanese to have to sell some of their huge holdings of USD assets. Between Japan being forced by demographics and China (before or after) getting fed up with their huge holdings of US assets being constantly devalued... The US' problem is pretty much completely out of their hands at this stage.
 
This whole sharade is the biggest load of bollocks in financial history. Just the fact that the US has a rating anything other than junk is a farce in itself. Obviously the rating agencies think it is ok to rate the USA in a different manner to say Greece.

The fact that Greece doesn't have the ability to print from an internal Fed to buy it's own treasuries means that it's ability to repay is based on simple tax receipts v's spending/debt obligations. Then why does the big 3 not rate the USA on the same criteria? The US has no hope of meeting it's debt obligations and budget spending without the help of the Fed defaulting on its own currency (the same goes for the treasury bonds).
 
The elephant in the room is that all the deficit is being spent on the military. And not one congressman has the balls to wind back the expenditure and bring the troops home, they're too afraid of their own military.

As Kyle Bass explained the US has 3 buckets into which they throw money.
1. Essentials (Welfare, Hospitals Transportation etc)
2 Non Defence Discretionary (Medicare Medicaide..pork barrelling)
3. Defence.

The problem is the 1st 2 buckets now take up 100% of tax revenues. The 3rd bucket (the military) is totally funded by deficit spending. Their whole war machine is being bought on a credit card.

And the Generals won't let those spineless lilly livered politicians cut their funding. They've assinated politicians before, they'll do it again if need be.
 
Clawhammer said:
The elephant in the room is that all the deficit is being spent on the military. And not one congressman has the balls to wind back the expenditure and bring the troops home, they're too afraid of their own military.

As Kyle Bass explained the US has 3 buckets into which they throw money.
1. Essentials (Welfare, Hospitals Transportation etc)
2 Non Defence Discretionary (Medicare Medicaide..pork barrelling)
3. Defence.

The problem is the 1st 2 buckets now take up 100% of tax revenues. The 3rd bucket (the military) is totally funded by deficit spending. Their whole war machine is being bought on a credit card.

And the Generals won't let those spineless lilly livered politicians cut their funding. They've assinated politicians before, they'll do it again if need be.
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According to the US Debt Clock the US:
- Federal budget deficit is $1.093 trillion
- total Defense spending including the Wars = $651 billion
- Medicare/Madicaid = $722 billion

These figures match a couple of news articles I read yesterday so presume they are accurate (although the news guys may have used the same source).

So even if 2/3 of the defence spending is purely related to the cost of the wars that's only 40% of the deficit. Consequently there's a lot of other stuff that needs to be cut just to get back to zero new debt let alone to try and start paying back the existing debt (which is costing $258 billion in interest per year even at these ridiculously low rates).
 
Lovey80 said:
This whole sharade is the biggest load of bollocks in financial history. Just the fact that the US has a rating anything other than junk is a farce in itself. Obviously the rating agencies think it is ok to rate the USA in a different manner to say Greece.
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Maybe it is because the agencies are under the jurisdiction of the US govt.
 
hawkeye said:
Lovey80 said:
This whole sharade is the biggest load of bollocks in financial history. Just the fact that the US has a rating anything other than junk is a farce in itself. Obviously the rating agencies think it is ok to rate the USA in a different manner to say Greece.
Click to expand...

Maybe it is because the agencies are under the jurisdiction of the US govt.
Click to expand...

Of course. They think they'll lose credibility or something (like AAA sub-prime was credible).
 
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