What now my Love?

[Sunshine]

..........or is there anywhere else to hide?

I managed by the skin of my teeth and doing some money movement by putting my money into government securities not to lose my butt on Wall Street when it tanked.

What now? Will a default by the US government mean that government securities belonging to individuals are also in jeopardy?

Supposedly by bailing out Wall Street, everything was going to be fixed. Are there any bona fide economists out there?

 

[Sunshine]

No takers? It seems that a default will send Wall Street into a tail spin. What about our government securies. No one wants to take a stab at it?

 

[Baruch Menachem]

It won't happen. US has pays its interest on the 1st and 15th. Interest issues won't be an issue for two further weeks. It is assumed the interest on the bonds will be paid from current collections. Taxes are still due and payable through the Federal Reserve (not part of the government, so not subject to shut down) so Interest and renewals will still take place as normal

Most US debt is in the form of bills and notes. These are always sold at discount, rather than as interest bearing bonds.

We have been through this process twice before. Most folks dealing in the market just see this all as no more than one more run through of a farce by Aristophanes. Bills, notes and interest will still be paid.

The big worry would be if the foreign holders all decided that this kind of farce is too dangerous, but they have no place to go. What are they going to buy instead? Japanese bonds? The Japanese debt circus is twice as silly as ours. Bonds from Italy? Bonds from Spain? Bonds from Greece?