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Dave
Mountain climber
the ANTI-fresno
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The difference is we have our own currency we can devalue. For now.
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JEleazarian
Trad climber
Fresno CA
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The difference is we have our own currency we can devalue. For now.
Almost, but not quite. The Greeks could withdraw from the Euro, but their debt is is still largely payable in Euros. US debt is payable in dollars, so a devaluation has the effect of cutting payments on the debt. Our hands will be tied when creditors of the Treasury insist on repayment in a different currency.
John
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Brokedownclimber
Trad climber
Douglas, WY
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I hate the word entitlements.
Entitlements = handouts. The usual result is even more people looking to become entitled.
Our entitlement programs are more insidious than the Greeks retirement programs; at least they had to do some work along the pathway to obtain them. Our chickens will come home to roost in the financial arena sooner that most would expect. The Greek default is not even a pimple on the butt of the $18.5 Trillion U.S. National Debt, but the ramifications are tremendous.
Central Banks = Loan Shark racketeers on a massive scale.
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John Duffield
Mountain climber
New York
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Our entitlement programs are more insidious than the Greeks retirement programs; at least they had to do some work along the pathway to obtain them. Our chickens will come home to roost in the financial arena sooner that most would expect. The Greek default is not even a pimple on the butt of the $18.5 Trillion U.S. National Debt, but the ramifications are tremendous.
Agreed again. There are people offering words of cheer today, about how different we are than Greece.
But the National debt has doubled in 6 years. The numbers are mind boggling. It's impossible for anyone to know how it will turn out. The numbers committed going forward, are much higher.
Meanwhile, the swine in Washington, award themselves ever higher benefits, raises and bonuses. It's completely out of control. At some point, the "Millenial" generation, which is on the hook for this largesse, will cut it off. They will have to.
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Norton
Social climber
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Since my days as a Stockbroker in the 1970s and continuing to today, the Conventional Wisdom among the Serious People was that there would be Terrible Consequences for
a growing US National Debt.
You will see, they said, the Chickens will come Home to Roost they said.
Such debt is "unsustainable" they sagely intoned, and the consequences would be horrific,
resulting in the Default of the United States of America.
And why exactly would this End of Times occur I would ask?
Because rising debt absolutely mean rising inflation and rising interest rates.
And you see, it is those inevitable sky high interest rates that will make America default.
Back then and until about 15 years ago I accepted such sage and deep analysis.
But as time went on and on, and this constantly predicted Death of the US Dollar and
Default, and rising rates did NOT HAPPEN, i searched for reasons of why not.
How could the Smart Money be so, damned WRONG, for so long?
And now with a 18 Trillion dollar national debt, interest rates are at the virtually the lowest level in US history, arguably back to colonial times in real terms.
The US Dollar is trading strongly and consistently in the mid 90s and the US Stock Market
has more than doubled in the past seven years, the economy has come out of recession
and is adding million of jobs.
Why if one didn't know better (sarcasm intended) one would think Goldilocks was in charge!
I have arrived at my own causes and conclusions for the reasons behind this which no one other than my wife cares to listen to.
So can I invite this thread's posters to take a shot as to why Conventional Wisdom has been so very, very wrong? And please, spare the inevitable forecasts of doom and gloom.
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Brokedownclimber
Trad climber
Douglas, WY
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Another thing most here have not thought all the way through: is was never money that was "loaned" to Greece, but credit. The ability to receive forgiveness of debts incurred. Yet the ECB wants to force a lower standard of living and "austerity" on the Greek populace for feeding at the trough so conveniently placed in front of them by their government. Governments LIKE dependent populations, since they are normally servile and mostly obedient. Cut off the food supply and riots usually result. Wait until the Greek retirement payments stop coming and then tell me you want a Big Fat Greek Vacation. Not.
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TWP
Trad climber
Mancos, CO & Bend, OR
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Norton:
Just go ahead and tell us the cause and your conclusions. No need for trial balloons of others' opinions for you to shoot out of the air.
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John Duffield
Mountain climber
New York
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So can I invite this thread's posters to take a shot as to why Conventional Wisdom has been so very, very wrong? And please, spare the inevitable forecasts of doom and gloom.
Seems the world dictators and other assorted thieves, loan us their money, virtually interest free for protection, or so I've been told.
If this is so, the Dennis Hastert and FIFA cases, would be a worse threat, than Greece. Suddenly, the Feds are looking a gift horse in the mouth. Where did you get that money? Who are you giving it to?
But no one knows. If anyone actually knew, they would be richer than Buffet.
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yanqui
climber
Balcarce, Argentina
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ummmm ... I hate to sound serious and all but right now the US is spending (with interest rates at a historical low) about 230 billion of its yearly budget (i.e. directly spending your tax dollars) shelling out interest payments on the debt. About half this money goes out to foreign interests. Not exactly chicken feed.
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SteveW
Trad climber
The state of confusion
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Hey Brokedown
Aren't you collecting Social Security?
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rottingjohnny
Sport climber
mammoth lakes ca
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All of the doom and gloom of financial armegedon would disappear if Obama would lower taxes for the wealthiest 1 percenters who could then create more jobs...And social security is just a pyramid scheme propped up to keep chruches from taking care of the poor...It's time to let the poor drown and the wealthy realize their higher place in our society...
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SteveW
Trad climber
The state of confusion
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Yep, rotting johnny, you got the bull by the horns.
Dripping with sarcasm.
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JEleazarian
Trad climber
Fresno CA
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Believe it or not, I generally agree with Norton on the issue of U.S. debt. Again, though, our debt is not a major issue as long as we can pay it off in dollars. All we need to do is inflate, and the debt/GDP ratio becomes sustainable. The Greeks, in contrast, don't currently have that option, and their government finances have no obvious way to right themselves so easily. Until our creditors demand payment in something else, our debt and Greece's debt are two different species.
The debts of smaller U.S. governmental units are a different story, however, because they don't have the same power to print money in which their debts are payable. On top of that, those smaller governmental entities have more real debt than what's on their books, because their pension liabilities are another form of debt. They can't keep increasing their debt/GDP ratios without Chapter 9 looming its head.
John
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Majid_S
Mountain climber
Karkoekstan
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Death of Euro and EC is about to start with one link breaking after another
The lazy Europeans (Except Germans) have to pay the price followed by another WWIII
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Curt
climber
Gold Canyon, AZ
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Whether Greece stays with the Euro or leaves and reintroduces the Drachma, there is no way in hell they will ever repay their current debt. So, the sh#t is going to hit the fan either way. As far as the US economy goes, it matters very little--we have almost no financial exposure to Greece and the economic ramifications will be similar either way. I also agree with others who have noted that the real 800b Gorilla in the room right now is China.
Curt
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TomCochrane
Trad climber
Santa Cruz Mountains and Monterey Bay
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The following Travel Advice has changed or been added since our last update ( 4 Jul 2015 12:04:21 EST):
* Greece
http://www.smartraveller.gov.au/zw-cgi/view/Advice/Greece
Current Advice Level: "Exercise normal safety precautions"
Change Summary:
Greek banks remain closed and are scheduled to re-open on 9 July (local time). Visitors should be aware that shortages of essential supplies are being reported, including of medical supplies. Make sure you have more than one means of payment with you (cash, debit cards, credit cards), and make sure you have enough money to cover emergencies and any unexpected delays. The level of the advice has not changed. We continue to advise Australians to exercise normal safety precautions in Greece. |
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TomCochrane
Trad climber
Santa Cruz Mountains and Monterey Bay
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There is a lot of financial news that is just misdirecting attention from huge unconfrontable problems. Any news about a financial recovery is just phony statistical manipulation. The bottom line is the US dollar could collapse at any time, leaving us all hanging out to dry.
Alan Greenspan recently announced that the Federal Debt at $18T is grossly underestimated based upon long term US commitments. That is greater than the global GNP and could never conceivable be paid. Just servicing that debt consumes most federal income...if you overlook the monthly billions of newly issued fiat funds...such as used to pay monthly Social Security. It's nice to be able to pay all your debts by just creating new money out of nothing...but the rest of the world is getting pretty tired of watching that happen....so much for the myth of a strong dollar...
China's Tienanmen Square has a huge electronic score card displaying the US National Debt...and they have big celebrations when the numbers tick up another trillion dollars.
Washington's response to this problem is trying to start an insane WWIII with Russia and China, so we don't have to pay the debt. However Russia and China have been playing the chess board smarter than Washington, dodging a whole series of invitations to go to war.
Meanwhile the US Federal Reserve private bank is caught between a rock and a hard place.
If they cease artificially manipulating the gold markets, the value of gold will sky rocket and the value of the dollar will plummet. (You can see gold value driven down almost daily during the first few minutes of markets opening...i.e. on Kitco.com)
However continuing to manipulate the price of gold to a level near the current cost to mine it...i.e. $1200 oz...allows the BRICS countries to buy all the gold they want at very low cost relatively to its real value in terms of fiat currencies.
So when China announces the Yuan as the only gold-based means of global exchange, the dollar is dead as the world reference currency and as a viable means of exchange. China's main incentive for not crashing the dollar is their outright ownership of much of the USA. So they are demanding real goods, such as gold and large portions of US mainland real estate that they are turning into Chinese enterprise zones, so they don't have to ship goods to US markets by sea.
Meanwhile China is establishing military control of the South China Sea and its petroleum resources. Washington has demanded they cease doing this. China's response is that if Washington pursues that demand there will be a war in the South China Sea.
The highly respected consulting firm McKinsey & Company recently did a study on the real value of gold relative to global fiat currencies. They added up the purported value of all fiat currencies and divided that by global gold quantities. The result was $33,400/oz. So by that measure you could buy a pretty nice car for a single one ounce gold coin.
If you have any significant savings in the hands of the bankers, now is your chance to get them under your personal control
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couchmaster
climber
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So Tom, although I don't disagree with everything you said, I'm curious how you would you answer Norton's question above?
John asked (paragraph spacing edit version): "Since my days as a Stockbroker in the 1970s and continuing to today, the Conventional Wisdom among the Serious People was that there would be Terrible Consequences for a growing US National Debt. You will see, they said, the Chickens will come Home to Roost they said. Such debt is "unsustainable" they sagely intoned, and the consequences would be horrific, resulting in the Default of the United States of America.
And why exactly would this End of Times occur I would ask? Because rising debt absolutely mean rising inflation and rising interest rates. And you see, it is those inevitable sky high interest rates that will make America default. Back then and until about 15 years ago I accepted such sage and deep analysis.
But as time went on and on, and this constantly predicted Death of the US Dollar and Default, and rising rates did NOT HAPPEN, i searched for reasons of why not. How could the Smart Money be so, damned WRONG, for so long? And now with a 18 Trillion dollar national debt, interest rates are at the virtually the lowest level in US history, arguably back to colonial times in real terms.
The US Dollar is trading strongly and consistently in the mid 90s and the US Stock Market has more than doubled in the past seven years, the economy has come out of recession and is adding million of jobs. Why if one didn't know better (sarcasm intended) one would think Goldilocks was in charge!
I have arrived at my own causes and conclusions for the reasons behind this which no one other than my wife cares to listen to. So can I invite this thread's posters to take a shot as to why Conventional Wisdom has been so very, very wrong? And please, spare the inevitable forecasts of doom and gloom."
Tom Cochrane said: " Jul 7, 2015 - 01:44am PT
There is a lot of financial news that is just misdirecting attention from huge unconfrontable problems. Any news about a financial recovery is just phony statistical manipulation. The bottom line is the US dollar could collapse at any time, leaving us all hanging out to dry.
Alan Greenspan recently announced that the Federal Debt at $18T is grossly underestimated based upon long term US commitments. That is greater than the global GNP and could never conceivable be paid. Just servicing that debt consumes most federal income...if you overlook the monthly billions of newly issued fiat funds...such as used to pay monthly Social Security. It's nice to be able to pay all your debts by just creating new money out of nothing...but the rest of the world is getting pretty tired of watching that happen....so much for the myth of a strong dollar...
China's Tienanmen Square has a huge electronic score card displaying the US National Debt...and they have big celebrations when the numbers tick up another trillion dollars.
Washington's response to this problem is trying to start an insane WWIII with Russia and China, so we don't have to pay the debt. However Russia and China have been playing the chess board smarter than Washington, dodging a whole series of invitations to go to war.
Meanwhile the US Federal Reserve private bank is caught between a rock and a hard place.
If they cease artificially manipulating the gold markets, the value of gold will sky rocket and the value of the dollar will plummet. (You can see gold value driven down almost daily during the first few minutes of markets opening...i.e. on Kitco.com)
However continuing to manipulate the price of gold to a level near the current cost to mine it...i.e. $1200 oz...allows the BRICS countries to buy all the gold they want at very low cost relatively to its real value in terms of fiat currencies.
So when China announces the Yuan as the only gold-based means of global exchange, the dollar is dead as the world reference currency and as a viable means of exchange. China's main incentive for not crashing the dollar is their outright ownership of much of the USA. So they are demanding real goods, such as gold and large portions of US mainland real estate that they are turning into Chinese enterprise zones, so they don't have to ship goods to US markets by sea.
Meanwhile China is establishing military control of the South China Sea and its petroleum resources. Washington has demanded they cease doing this. China's response is that if Washington pursues that demand there will be a war in the South China Sea.
The highly respected consulting firm McKinsey & Company recently did a study on the real value of gold relative to global fiat currencies. They added up the purported value of all fiat currencies and divided that by global gold quantities. The result was $33,400/oz. So by that measure you could buy a pretty nice car for a single one ounce gold coin.
If you have any significant savings in the hands of the bankers, now is your chance to get them under your personal control "
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John Duffield
Mountain climber
New York
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Death of Euro and EC is about to start with one link breaking after another
Indeed. I think the Greece situation, will accelerate the demise of Italy and Spain. Greece, isn't much but those are bigger economically. If I was living on a Pension in either, I'd be looking at my options.
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Jan
Mountain climber
Colorado, Nepal & Okinawa
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I believe the real worth of a country is not in its gold, but in its people. I've lived in both Germany and Japan which were both flattened and starving 70 years ago and it was the people who built their countries up from ashes. Both had outside help which just means it would have taken them longer otherwise, but the results I believe, would have been the same.
The U.S. is capable of great things when we make up our mind what we want to do. The problem now is not our lack of gold but our lack of vision and political will to convey a clear message of what needs doing in order to motivate our country.
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