Is the US national "debt" an illusion?

[Toro]

The entire monetary and financial system is based in Treasuries. The financial system would - literally - stop working and collapse because Treasuries are the collateral used in the repo markets to fund cash needs amongst financial institutions.

It would collapse currencies all around the world, including the dollar, because Treasury holdings are used to backstop central bank assets.

There would be a capital strike as foreigners would not get paid and our capital account that foreigners finance would collapse.

Interest rates would soar, causing borrowing costs to skyrocket and bankruptcies would go through the roof.

Stock markets would crash because all financial markets are priced off Treasuries.

The Treasury market is $13 trillion. $2.5 trillion is held by central banks. $6.2T is held by foreigners. The rest - $4.3T, or a quarter of GDP - are held as savings in the US, either by banks, insurance companies, individuals or mutual funds. That would all be gone.

It is absolute insanity to think that repudiating Treasuries in any way is a good idea. It's not a serious comment.

The entire monetary and financial system is based in Treasuries. The financial system would - literally - stop working and collapse because Treasuries are the collateral used in the repo markets to fund cash needs amongst financial institutions.

It would collapse currencies all around the world, including the dollar, because Treasury holdings are used to backstop central bank assets.

There would be a capital strike as foreigners would not get paid and our capital account that foreigners finance would collapse.

Interest rates would soar, causing borrowing costs to skyrocket and bankruptcies would go through the roof.

Stock markets would crash because all financial markets are priced off Treasuries.

The Treasury market is $13 trillion. $2.5 trillion is held by central banks. $6.2T is held by foreigners. The rest - $4.3T, or a quarter of GDP - are held as savings in the US, either by banks, insurance companies, individuals or mutual funds. That would all be gone.

It is absolute insanity to think that repudiating Treasuries in any way is a good idea. It's not a serious comment.

Racking up the debt in the first place was insanity. Sooner or later the debt will be repudiated, but not by choice, but rather by circumstances because it is unsustainable. It's a global problem, but it makes far more sense to do it now (even though it should have done long before it reached such insane levels) rather than wait for it to implode.

Financial Markets, Banks, and Pension Funds are all a house of cards to begin with, a house of cards WE built with absurd policy. Anyone doubting that need not look any further than the MBS implosion of '08.

There WOULD BE FALLOUT, there is no denying that, but continuously kicking the can down the road only makes the end game worse. Markets would recover and God forbid the government has to sell off some of it's assets. Given the circumstances $4.7T in domestic holdings isn't the end of the world. Waiting until the entire global debt bomb goes off is far worse. Let the chips fall where they may, which is what should have been done in '08.

Repudiation is a sound principle:

Mises Daily Mises Institute

I sympathize with your concern about the build-up of debt, but we CAN continue to roll the debt forever. As long as the United States exists, the country never has to pay off our debt. There is no inevitability of debt "repudiation." For most of the 239-year history of this nation, we have had debt of one sort or another.

Companies are no different. General Electric has been around for 125 years, and for most of its existence, it has had debt. General Electric never has to pay off all its debt either. And the United States government, which makes the laws of which GE and all companies operate, has the ability to tax, a far greater power than GE's asset base or earnings power.

What has differed over time is the level of debt. And what matters, as any student of Finance 101 knows, isn't the level of debt - its the level of debt to income. That's true of any individual or entity. If an individual or entity borrows faster than nominal income, eventually, that becomes a problem of one sort or another. That would be true of the United States as it is for you and me. But that doesn't mean that the debt all has to be paid off. The nominal amount of debt can continue to grow as long as it doesn't exceed the nominal growth of GDP indefinitely. That's simple math.

Even such, the consequences doesn't mean that the US would have to repudiate its debt since the US borrows in its own currency. It could merely reflate its debt away. That's a bad thing, for certain, but it isn't inevitable either.

BTW, in financial markets, repudiation generally means cancel outright, i.e. you get $0 back. The United States stating that $13 trillion of debt was now worth $0 would be insane lunacy. You - or your parents - would see your/their savings decimated, if not wiped out. Financial institutions would collapse, financial markets would collapse, and the global economy would collapse. It would be far, far worse than the Great Depression. No one serious says this.

Oh, and financial markets, banks and pension funds aren't house of cards by definition. Such a belief fundamentally misunderstands the nature of economics.

 

[EdwardBaiamonte]

The entire monetary and financial system is based in Treasuries. The financial system would - literally - stop working and collapse because Treasuries are the collateral used in the repo markets to fund cash needs amongst financial institutions.

It would collapse currencies all around the world, including the dollar, because Treasury holdings are used to backstop central bank assets.

There would be a capital strike as foreigners would not get paid and our capital account that foreigners finance would collapse.

Interest rates would soar, causing borrowing costs to skyrocket and bankruptcies would go through the roof.

Stock markets would crash because all financial markets are priced off Treasuries.

The Treasury market is $13 trillion. $2.5 trillion is held by central banks. $6.2T is held by foreigners. The rest - $4.3T, or a quarter of GDP - are held as savings in the US, either by banks, insurance companies, individuals or mutual funds. That would all be gone.

It is absolute insanity to think that repudiating Treasuries in any way is a good idea. It's not a serious comment.

The entire monetary and financial system is based in Treasuries. The financial system would - literally - stop working and collapse because Treasuries are the collateral used in the repo markets to fund cash needs amongst financial institutions.

It would collapse currencies all around the world, including the dollar, because Treasury holdings are used to backstop central bank assets.

There would be a capital strike as foreigners would not get paid and our capital account that foreigners finance would collapse.

Interest rates would soar, causing borrowing costs to skyrocket and bankruptcies would go through the roof.

Stock markets would crash because all financial markets are priced off Treasuries.

The Treasury market is $13 trillion. $2.5 trillion is held by central banks. $6.2T is held by foreigners. The rest - $4.3T, or a quarter of GDP - are held as savings in the US, either by banks, insurance companies, individuals or mutual funds. That would all be gone.

It is absolute insanity to think that repudiating Treasuries in any way is a good idea. It's not a serious comment.

Racking up the debt in the first place was insanity. Sooner or later the debt will be repudiated, but not by choice, but rather by circumstances because it is unsustainable. It's a global problem, but it makes far more sense to do it now (even though it should have done long before it reached such insane levels) rather than wait for it to implode.

Financial Markets, Banks, and Pension Funds are all a house of cards to begin with, a house of cards WE built with absurd policy. Anyone doubting that need not look any further than the MBS implosion of '08.

There WOULD BE FALLOUT, there is no denying that, but continuously kicking the can down the road only makes the end game worse. Markets would recover and God forbid the government has to sell off some of it's assets. Given the circumstances $4.7T in domestic holdings isn't the end of the world. Waiting until the entire global debt bomb goes off is far worse. Let the chips fall where they may, which is what should have been done in '08.

Repudiation is a sound principle:

Mises Daily Mises Institute

I sympathize with your concern about the build-up of debt, but we CAN continue to roll the debt forever. As long as the United States exists, the country never has to pay off our debt. There is no inevitability of debt "repudiation." For most of the 239-year history of this nation, we have had debt of one sort or another.

Companies are no different. General Electric has been around for 125 years, and for most of its existence, it has had debt. General Electric never has to pay off all its debt either. And the United States government, which makes the laws of which GE and all companies operate, has the ability to tax, a far greater power than GE's asset base or earnings power.

What has differed over time is the level of debt. And what matters, as any student of Finance 101 knows, isn't the level of debt - its the level of debt to income. That's true of any individual or entity. If an individual or entity borrows faster than nominal income, eventually, that becomes a problem of one sort or another. That would be true of the United States as it is for you and me. But that doesn't mean that the debt all has to be paid off. The nominal amount of debt can continue to grow as long as it doesn't exceed the nominal growth of GDP indefinitely. That's simple math.

Even such, the consequences doesn't mean that the US would have to repudiate its debt since the US borrows in its own currency. It could merely reflate its debt away. That's a bad thing, for certain, but it isn't inevitable either.

BTW, in financial markets, repudiation generally means cancel outright, i.e. you get $0 back. The United States stating that $13 trillion of debt was now worth $0 would be insane lunacy. You - or your parents - would see your/their savings decimated, if not wiped out. Financial institutions would collapse, financial markets would collapse, and the global economy would collapse. It would be far, far worse than the Great Depression. No one serious says this.

Oh, and financial markets, banks and pension funds aren't house of cards by definition. Such a belief fundamentally misunderstands the nature of economics.

TC triple does not realize that he is parroting Von Mises from a time in history when economists did not understand how to manage an economy.

 

[TC_Triple3]

The entire monetary and financial system is based in Treasuries. The financial system would - literally - stop working and collapse because Treasuries are the collateral used in the repo markets to fund cash needs amongst financial institutions.

It would collapse currencies all around the world, including the dollar, because Treasury holdings are used to backstop central bank assets.

There would be a capital strike as foreigners would not get paid and our capital account that foreigners finance would collapse.

Interest rates would soar, causing borrowing costs to skyrocket and bankruptcies would go through the roof.

Stock markets would crash because all financial markets are priced off Treasuries.

The Treasury market is $13 trillion. $2.5 trillion is held by central banks. $6.2T is held by foreigners. The rest - $4.3T, or a quarter of GDP - are held as savings in the US, either by banks, insurance companies, individuals or mutual funds. That would all be gone.

It is absolute insanity to think that repudiating Treasuries in any way is a good idea. It's not a serious comment.

The entire monetary and financial system is based in Treasuries. The financial system would - literally - stop working and collapse because Treasuries are the collateral used in the repo markets to fund cash needs amongst financial institutions.

It would collapse currencies all around the world, including the dollar, because Treasury holdings are used to backstop central bank assets.

There would be a capital strike as foreigners would not get paid and our capital account that foreigners finance would collapse.

Interest rates would soar, causing borrowing costs to skyrocket and bankruptcies would go through the roof.

Stock markets would crash because all financial markets are priced off Treasuries.

The Treasury market is $13 trillion. $2.5 trillion is held by central banks. $6.2T is held by foreigners. The rest - $4.3T, or a quarter of GDP - are held as savings in the US, either by banks, insurance companies, individuals or mutual funds. That would all be gone.

It is absolute insanity to think that repudiating Treasuries in any way is a good idea. It's not a serious comment.

Racking up the debt in the first place was insanity. Sooner or later the debt will be repudiated, but not by choice, but rather by circumstances because it is unsustainable. It's a global problem, but it makes far more sense to do it now (even though it should have done long before it reached such insane levels) rather than wait for it to implode.

Financial Markets, Banks, and Pension Funds are all a house of cards to begin with, a house of cards WE built with absurd policy. Anyone doubting that need not look any further than the MBS implosion of '08.

There WOULD BE FALLOUT, there is no denying that, but continuously kicking the can down the road only makes the end game worse. Markets would recover and God forbid the government has to sell off some of it's assets. Given the circumstances $4.7T in domestic holdings isn't the end of the world. Waiting until the entire global debt bomb goes off is far worse. Let the chips fall where they may, which is what should have been done in '08.

Repudiation is a sound principle:

Mises Daily Mises Institute

I sympathize with your concern about the build-up of debt, but we CAN continue to roll the debt forever. As long as the United States exists, the country never has to pay off our debt. There is no inevitability of debt "repudiation." For most of the 239-year history of this nation, we have had debt of one sort or another.

Companies are no different. General Electric has been around for 125 years, and for most of its existence, it has had debt. General Electric never has to pay off all its debt either. And the United States government, which makes the laws of which GE and all companies operate, has the ability to tax, a far greater power than GE's asset base or earnings power.

What has differed over time is the level of debt. And what matters, as any student of Finance 101 knows, isn't the level of debt - its the level of debt to income. That's true of any individual or entity. If an individual or entity borrows faster than nominal income, eventually, that becomes a problem of one sort or another. That would be true of the United States as it is for you and me. But that doesn't mean that the debt all has to be paid off. The nominal amount of debt can continue to grow as long as it doesn't exceed the nominal growth of GDP indefinitely. That's simple math.

Even such, the consequences doesn't mean that the US would have to repudiate its debt since the US borrows in its own currency. It could merely reflate its debt away. That's a bad thing, for certain, but it isn't inevitable either.

BTW, in financial markets, repudiation generally means cancel outright, i.e. you get $0 back. The United States stating that $13 trillion of debt was now worth $0 would be insane lunacy. You - or your parents - would see your/their savings decimated, if not wiped out. Financial institutions would collapse, financial markets would collapse, and the global economy would collapse. It would be far, far worse than the Great Depression. No one serious says this.

Oh, and financial markets, banks and pension funds aren't house of cards by definition. Such a belief fundamentally misunderstands the nature of economics.

TC triple does not realize that he is parroting Von Mises from a time in history when economists did not understand how to manage an economy.

Both Mises and Rothbard actually, and economist still don't know how because it can't be done. Central Planning has been and always will be an epic failure.

 

[EdwardBaiamonte]

The entire monetary and financial system is based in Treasuries. The financial system would - literally - stop working and collapse because Treasuries are the collateral used in the repo markets to fund cash needs amongst financial institutions.

It would collapse currencies all around the world, including the dollar, because Treasury holdings are used to backstop central bank assets.

There would be a capital strike as foreigners would not get paid and our capital account that foreigners finance would collapse.

Interest rates would soar, causing borrowing costs to skyrocket and bankruptcies would go through the roof.

Stock markets would crash because all financial markets are priced off Treasuries.

The Treasury market is $13 trillion. $2.5 trillion is held by central banks. $6.2T is held by foreigners. The rest - $4.3T, or a quarter of GDP - are held as savings in the US, either by banks, insurance companies, individuals or mutual funds. That would all be gone.

It is absolute insanity to think that repudiating Treasuries in any way is a good idea. It's not a serious comment.

The entire monetary and financial system is based in Treasuries. The financial system would - literally - stop working and collapse because Treasuries are the collateral used in the repo markets to fund cash needs amongst financial institutions.

It would collapse currencies all around the world, including the dollar, because Treasury holdings are used to backstop central bank assets.

There would be a capital strike as foreigners would not get paid and our capital account that foreigners finance would collapse.

Interest rates would soar, causing borrowing costs to skyrocket and bankruptcies would go through the roof.

Stock markets would crash because all financial markets are priced off Treasuries.

The Treasury market is $13 trillion. $2.5 trillion is held by central banks. $6.2T is held by foreigners. The rest - $4.3T, or a quarter of GDP - are held as savings in the US, either by banks, insurance companies, individuals or mutual funds. That would all be gone.

It is absolute insanity to think that repudiating Treasuries in any way is a good idea. It's not a serious comment.

Racking up the debt in the first place was insanity. Sooner or later the debt will be repudiated, but not by choice, but rather by circumstances because it is unsustainable. It's a global problem, but it makes far more sense to do it now (even though it should have done long before it reached such insane levels) rather than wait for it to implode.

Financial Markets, Banks, and Pension Funds are all a house of cards to begin with, a house of cards WE built with absurd policy. Anyone doubting that need not look any further than the MBS implosion of '08.

There WOULD BE FALLOUT, there is no denying that, but continuously kicking the can down the road only makes the end game worse. Markets would recover and God forbid the government has to sell off some of it's assets. Given the circumstances $4.7T in domestic holdings isn't the end of the world. Waiting until the entire global debt bomb goes off is far worse. Let the chips fall where they may, which is what should have been done in '08.

Repudiation is a sound principle:

Mises Daily Mises Institute

I sympathize with your concern about the build-up of debt, but we CAN continue to roll the debt forever. As long as the United States exists, the country never has to pay off our debt. There is no inevitability of debt "repudiation." For most of the 239-year history of this nation, we have had debt of one sort or another.

Companies are no different. General Electric has been around for 125 years, and for most of its existence, it has had debt. General Electric never has to pay off all its debt either. And the United States government, which makes the laws of which GE and all companies operate, has the ability to tax, a far greater power than GE's asset base or earnings power.

What has differed over time is the level of debt. And what matters, as any student of Finance 101 knows, isn't the level of debt - its the level of debt to income. That's true of any individual or entity. If an individual or entity borrows faster than nominal income, eventually, that becomes a problem of one sort or another. That would be true of the United States as it is for you and me. But that doesn't mean that the debt all has to be paid off. The nominal amount of debt can continue to grow as long as it doesn't exceed the nominal growth of GDP indefinitely. That's simple math.

Even such, the consequences doesn't mean that the US would have to repudiate its debt since the US borrows in its own currency. It could merely reflate its debt away. That's a bad thing, for certain, but it isn't inevitable either.

BTW, in financial markets, repudiation generally means cancel outright, i.e. you get $0 back. The United States stating that $13 trillion of debt was now worth $0 would be insane lunacy. You - or your parents - would see your/their savings decimated, if not wiped out. Financial institutions would collapse, financial markets would collapse, and the global economy would collapse. It would be far, far worse than the Great Depression. No one serious says this.

Oh, and financial markets, banks and pension funds aren't house of cards by definition. Such a belief fundamentally misunderstands the nature of economics.

TC triple does not realize that he is parroting Von Mises from a time in history when economists did not understand how to manage an economy.

Both Mises and Rothbard actually, and economist still don't know how because it can't be done. Central Planning has been and always will be an epic failure.

failure???? when millions are standing in lines for the new iphones??? That seems pretty stupid

 

[ralfy]

The monetary system is part of a larger credit system, with notional values many times greater than the size of the global economy:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

"Only" a fraction of that was needed to bring the same economy to its knees in 2008.

 

[EdwardBaiamonte]

The monetary system is part of a larger credit system, with notional values many times greater than the size of the global economy:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

"Only" a fraction of that was needed to bring the same economy to its knees in 2008.

dear, today people are standing in lines to buy the new iphones so there is little to worry about especially since the Fed seemingly knows how to handle macro problems that come up now far better than ever.

 

[ralfy]

The monetary system is part of a larger credit system, with notional values many times greater than the size of the global economy:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

"Only" a fraction of that was needed to bring the same economy to its knees in 2008.

dear, today people are standing in lines to buy the new iphones so there is little to worry about especially since the Fed seemingly knows how to handle macro problems that come up now far better than ever.

What you shared doesn't counter my argument: the U.S. is heavily dependent on consumer spending, in turn based on increasing debt. How long will that arrangement last?

 

[Matthew Libman]

If anyone is interested, here are a few snippets from my activism during 2012:

Me (Matthew Libman) with Newt and Callista Gingrich: Matt Libman with Newt Gingrich Flickr - Photo Sharing

Me (Matthew Libman) with Jesse Jackson: Matt Libman and Jesse Jackson Flickr - Photo Sharing

Lobbying for the Volcker Rule with NAACP President Ben Jealous and Rev. Jesse Jackson Sr.:

Calling for a boycott of the Los Angeles Times and Chicago Tribune to prevent Rupert Murdoch's hostile takeover of the newspapers:

A 30 minute collection of clips of my activism including Mitt Romney, Newt Gingrich, Ron Paul, Occupy Wall Street, NATO, and more:

Thanks for your support.

 

[EdwardBaiamonte]

the U.S. is heavily dependent on consumer spending, in turn based on increasing debt. How long will that arrangement last?

any reason to think it won't last forever?? why is it based in increasing debt rather than increasing income?

 

[ralfy]

the U.S. is heavily dependent on consumer spending, in turn based on increasing debt. How long will that arrangement last?

any reason to think it won't last forever?? why is it based in increasing debt rather than increasing income?

Fewer cents received for each additional dollar borrowed as previous debts plus interest have to be paid. And that coupled with increasing costs.

 

[EdwardBaiamonte]

the U.S. is heavily dependent on consumer spending, in turn based on increasing debt. How long will that arrangement last?

any reason to think it won't last forever?? why is it based in increasing debt rather than increasing income?

Fewer cents received for each additional dollar borrowed as previous debts plus interest have to be paid. And that coupled with increasing costs.

dear can you explain is decent english??? or admit you have no trainig in economics

 

[easymoney1972]

I tend to agree with many of the forward-thinking viewpoints that are shared on political message boards. However, I feel there is misinformation being circulated regarding the US national debt. The core question that must be answered: What is the national wealth?

Private wealth in the US is almost $80 trillion. But dig deeper: What is the mineral wealth in our national parkland? What are the Rocky Mountains, Mendocino County, and ANWR worth? What is the aggregate oil wealth in US public lands? What is the value of the US military in the jungle of international relations?

I argue that the $18 Trillion national debt pales in comparison to the national wealth of the United States. There is no better example of this than the revenue generated from Obama's successful energy exploration campaign.

When you take a look at the massive swaths of valuable land held by the federal government, it becomes clear that the total federally-owned real estate, oil, minerals, etc. within the borders of the USA could be valued in the quadrillions of dollars.

One thing has become increasingly clear to me: the United States HAS debt, but it is really not IN debt.

The purpose of the Federal Reserve is to govern the people through the money supply. The threat of hyperinflation or deflationary depression is exaggerated. The resource wealth of the United States - as well as the large, rich, taxable population - provides a backstop that keeps our currency strong, even in expansionary environments.

I believe this backstop is far more valuable than prior generations' use of precious metal reserves. I concede gold and silver are more tangible, but defining the national wealth by reserves of scarce metals is nothing more than a form of social brainwashing intended to keep resource-rich Americans feeling poor.

Conspiracy theorists and John Birchers who measure the national debt against gold reserves are engaging in monetary child's play. However, the Federal Reserve's ability to spend the past decade in crisis while hiding the money supply (M3) from the American public is brilliant. A brilliant scam that must come to an end in the United States, as it has in central banks throughout Europe and across the globe.

The strength of the dollar in FOREX markets in the wake of QE3 invalidates many conspiracy theories. As a market student and participant, I believe the dollar is legitimately strong and would remain strong through QE4, QE5, and QE6.

Is it time to end the myth of false scarcity? Is the easy answer - a dramatic increase in the debt ceiling to fund the Small Business Administration, Farm Service Agency, and regional banks - the best path for the US economy?

Recently an interesting statistic was released. The USA has fewer corporations today than 40 years ago, despite having three times as many citizens. If "corporations are people," do we just need more "people?"

Or is a multi-decade Japanese-style depression a better way to break the will of American men, break the daughters of the revolution into prostitution, seize American's weapons, and ultimately rejoin the British Crown and join the New/Old World Order?

I ask that question only half-sarcastically, because that appears to be the the intent of the current world order, and the path the United States is headed. Especially if either Hillary "Forester de Rothschild-RHODam" Clinton, or Jeb "Lehman is now Barclays" Bush are elected president.

This is serious business.

Sure, a new monetary system would be nice. But is a total revolution possible? Perhaps it is time to submit to reality, and finally admit that Reagan was right.

Mine eyes have seen the glory of the coming of a new hashtag.

Matthew Libman
Charleston, SC

Blah-blah! 99% of national debt is owed to the Federal Reserve. This is from the treasury website: Congress has specified that a Federal Reserve Bank must hold collateral equal in value to the Federal Reserve notes that the Bank receives. This collateral is chiefly gold certificates and United States securities. This provides backing for the note issue. The idea was that if the Congress dissolved the Federal Reserve System, the United States would take over the notes (liabilities). This would meet the requirements of Section 411, but the government would also take over the assets, which would be of equal value. Federal Reserve notes represent a first lien on all the assets of the Federal Reserve Banks, and on the collateral specifically held against them.
SO IF CONGRESS REPEALS THE FEDERAL RESERVE ACT, THE GOVERNMENT BREAKS EVEN AND OWES NOTHING!

 

[EdwardBaiamonte]

SO IF CONGRESS REPEALS THE FEDERAL RESERVE ACT, THE GOVERNMENT BREAKS EVEN AND OWES NOTHING!

what happens is a world wide depression begins unless you replace the Fed with something that does exactly the same thing.

Do you understand??

 

[easymoney1972]

SO IF CONGRESS REPEALS THE FEDERAL RESERVE ACT, THE GOVERNMENT BREAKS EVEN AND OWES NOTHING!

what happens is a world wide depression begins unless you replace the Fed with something that does exactly the same thing.

Do you understand??

Are you purposely spreading misinformation or do you actually believe what you are saying? The FED creates tax backed money out of thin air, you don't have to replace than. By repealing the Fed Act your government would settle-at least on paper-98% of it's debt. Newly issued treasury notes would become bank reserve here. As for other countries their livelihood would depend on their willingness to kick private central banks to the curb as well. You read the bankers scare script so well perhaps you should pursue a career in theater.

 

[EdwardBaiamonte]

SO IF CONGRESS REPEALS THE FEDERAL RESERVE ACT, THE GOVERNMENT BREAKS EVEN AND OWES NOTHING!

what happens is a world wide depression begins unless you replace the Fed with something that does exactly the same thing.

Do you understand??

Are you purposely spreading misinformation or do you actually believe what you are saying? The FED creates tax backed money out of thin air, you don't have to replace than. By repealing the Fed Act your government would settle-at least on paper-98% of it's debt. Newly issued treasury notes would become bank reserve here. As for other countries their livelihood would depend on their willingness to kick private central banks to the curb as well. You read the bankers scare script so well perhaps you should pursue a career in theater.

dear, with the fed gone who would handle monetary policy and what would that policy be.

 

[TC_Triple3]

dear can you explain is decent english??? or admit you have no trainig in economics

It's pretty clear that you don't. 200 level courses (at best)? The only one who seems to think you do is YOU.

Rothbard sums you up pretty well:

“It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”

The Federal Reserve is the head of a government run banking cartel that is corrupt and entirely bankrupt. Monetary Policy serves only the Government and has no social benefit whatsoever. It only dilutes the exchange value of existing currency. Repealing the Federal Reserve Act would have none of the dire consequences that you claim it will. It would however, bring our military adventurism to a screeching halt as Central Banking funds the War Machine. My, that would a shame wouldn't it?

Your use of the term Republican Capitalism cracks me up. There are multiple terms in common use to describe our economy. Corporatism, Crony Capitalism, and Italian-style Fascism, are the most common and accurate terms. I suppose Republican Capitalism could be added to that list, but the others aren't exactly definitions of a desirable economic system anymore than Republican Capitalism is. A system that benefits those that can extract privileges and benefits (from government) for themselves at the expense of ALL OTHERS! Is this system superior to a pure socialist system? Yes, but that's only true in the same sense that saying that Type II Diabetes is better than Pancreatic Cancer.

 

[Matthew Libman]

There are alternative, non-debt based fiat options the US Treasury could employ to pay off the debt and continue to stimulate economic growth. However, these strategies would be completely revolutionary, and would essentialy make the president an elected king. Conspiracy theorists suggest this was JFK's intention with EO 11110. I read the order and do not interpret it the same way as the tinfoil hat crowd, but I do understand the underlying philosophy. It is good economics, but terrible politics.

Any major move away from the Fed would be the nuclear option of monetary policy. It would result in an entire shift in the world order, and would not be without consequence. The emotional sense of false scarcity that central banks and sovereign debt create governs the amount of natural resources populations consume, and forces societies to work together. Unless your favorite movie is "300," the current world order is probably for you. It is better we play along with the debt game as enlightened participants than experience a complete revolution. And by revolution, I mean bloody.

However, if we don't step on the gas now and print our way out of this mess there will likely be another type of revolution. Or at least a big fire. That fact is pretty well laid out in history books, including the one King James commissioned.

 

[Delta4Embassy]

"Is the national debt an illusion" is something someone asks when they don't wanna have to even try and pay it.

 

[ralfy]

the U.S. is heavily dependent on consumer spending, in turn based on increasing debt. How long will that arrangement last?

any reason to think it won't last forever?? why is it based in increasing debt rather than increasing income?

Fewer cents received for each additional dollar borrowed as previous debts plus interest have to be paid. And that coupled with increasing costs.

dear can you explain is decent english??? or admit you have no trainig in economics

America s Total Debt Report - summary page - by MWHodges

 

[easymoney1972]

There are alternative, non-debt based fiat options the US Treasury could employ to pay off the debt and continue to stimulate economic growth. However, these strategies would be completely revolutionary, and would essentialy make the president an elected king. Conspiracy theorists suggest this was JFK's intention with EO 11110. I read the order and do not interpret it the same way as the tinfoil hat crowd, but I do understand the underlying philosophy. It is good economics, but terrible politics.

Any major move away from the Fed would be the nuclear option of monetary policy. It would result in an entire shift in the world order, and would not be without consequence. The emotional sense of false scarcity that central banks and sovereign debt create governs the amount of natural resources populations consume, and forces societies to work together. Unless your favorite movie is "300," the current world order is probably for you. It is better we play along with the debt game as enlightened participants than experience a complete revolution. And by revolution, I mean bloody.

However, if we don't step on the gas now and print our way out of this mess there will likely be another type of revolution. Or at least a big fire. That fact is pretty well laid out in history books, including the one King James commissioned.

But the alternative is a slow-but certain-economic death. I'd rather bare the displeasure of angry banks now than watch as the dollar inches towards implosion. In 1 decade I've seen the dollar go from being #1 in the world to a point where it's struggles to hold 3rd. I'm not so sure how "bloody" this might be, because you'd render the bloodthirsty people in the world considerably poorer.