huge debt

Sep 2014
4
0
Poland
#1
What do you think American government together with FED are going to do with the huge debt? It's certain one day they will not be able to pay their bond obligations - so what are your predictions?
 
Oct 2012
3,841
627
Louisville, Ky
#2
What do you think American government together with FED are going to do with the huge debt? It's certain one day they will not be able to pay their bond obligations - so what are your predictions?
As Americas debt has been in existence for many decades (and is in fact now part of world finance)...I do not see it as a large concern as of yet. Once our Government becomes functional again this imbalance will be further addressed (this administration is no worse and perhaps better than the last).
 
Oct 2012
3,841
627
Louisville, Ky
#3
My prediction: Romney will become President, we will finally have both responsible energy & fiscal policies, causing the economy to boom, which in turn increase tax revenues dramatically, causing unprecedented easing of the National Debt. :cool::cool::cool:
An interesting prediction...might I recommend you avoid Las Vegas?

For one...the GOP will not try Romney again, and Romney has no policies to speak of thus far put forward.
 
Sep 2014
4
0
Poland
#4
Well...it's a very optimistic point of view :) I'm afraid it might be harder this time as currently majority of US bonds is already bought by the FED itself and "friends" in order to keep the interest rates artificially low (otherwise debt service could be hard or impossible). For example very small Belgium has recently bought the amount of US bonds it couldn't actually afford. The country which has about 26 billion USD of currency reserves and GDP 484 bn dollars bought US bonds worth about $201.1 billion during the period of about 5 months...magic? Rather it means that the real owner of those bonds is somebody else who doesn't want to disclose his identity... The euro zone nation is now the third largest holder of U.S. Treasuries with $381.4 billion, after China and Japan. You can read on this here:
http://www.ft.com/cms/s/0/a1de1546-c489-11e3-b2fb-00144feabdc0.html#axzz3DHiticfI
http://www.reuters.com/article/2014/05/15/usa-economy-capital-idUSL1N0O117Z20140515
It might all mean that there is a "point of no return" for the amount of US debt as well and perhaps it has already been reached...
 
Sep 2014
4
0
Poland
#5
There is never a point of no return (unless of course you believe the Earth it flat and you fall off at some point).
It depends how you define it. I meant that there might be an international pressure (or even necessity) to rebuild global financial system and some countries already want to replace US dollar with something else (as a global reserve currency). The Russians, China and some other countries are already taking some steps... and many countries reduced significantly the amount of US bonds they buy.
 

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