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Thread: Shy Trumpies in the Bilge

  1. #141
    Join Date
    Apr 1999
    Hyannis, MA, USA

    Default Re: Shy Trumpies in the Bilge

    Sociopaths are ashamed of nothing. They just hide their malfeasance to better manipulate their targets.

  2. #142
    Join Date
    Aug 2005
    Independence, MO

    Default Re: Shy Trumpies in the Bilge

    Oznabrag, yesterday I was surprised the idea that your nation and mine went bankrupt is Spring wasn't more widely known. Naturally, the City of London's press jumped in overnight and reminded our upstart country how bad it got and warned us we better not do it again:

    “Treasuries are quickly the greatest and most traded fixed-income securities in the world. Thanks to their security, liquidity and the American dollar’s status as the worldwide reserve currency, they are the world’s “risk-free” rate, the default sanctuary, and assist in a huge quantity of monetary deals.
    However, the coronavirus crisis triggered trading conditions in the generally well-behaved US federal government bond market to weaken considerably inMarch
    The dislocations were so bad that the Federal Reserve was required to step in much more strongly than it performed in the monetary crisis of 2008.
    This type of mayhem need to not be enabled to occur in such an important part of the monetary system. Although it would most likely have actually settled ultimately– there are constantly purchasers of Treasuries eventually– it might have triggered catastrophic mishaps along the method.

    The threat is that the quick market healing crafted by the Fed’s remarkable actions makes us forget how close Treasury trading pertained to breaking down in March, and blunts efforts to understand what happened— and guarantee it never takes place once again.”

    US Treasury market’s brush with disaster must never be repeated Financial TimesSeptember 21, 2020

    How bad was it Oznabrag?

    “From a combination of voluntary and imposed social distancing, the economy is collapsing. Twenty million people, more than 1 in 10 US workers, lost their jobs in the first month of the COVID-19 shutdowns. That’s more than the entire 2008–09 recession, all in the course of three weeks. A third of US apartment renters didn’t pay April rent. Run that up through the financial system: most guesses say that companies have one to three months of cash on hand, and then fail.*
    If you want to know why the Fed hit the panic button, it’s because every alarm went off.


    The Treasury agrees to take the first tranche of losses, so the Fed can say this is a safe loan. Fed chair Jay Powell was, as usual, clear on this in an April 9 speech (delivered via Zoom, naturally) to the Brookings Institution:*
    I would stress that these are lending powers, not spending powers. The Fed is not authorized to grant money to particular beneficiaries. The Fed can only make secured loans to solvent entities with the expectation that the loans will be fully repaid.
    What happens if the loans aren’t fully repaid? Well, the Treasury takes the first 5–10 percent of losses. But right now, the Treasury gets its money from the Fed. So it really comes back to printed money anyway. If losses are so severe that the Fed loses a lot of money, the Treasury will have to recapitalize the Fed with a gift of T-bills.*
    If the loans are not paid back, one way or another, we end up with that much more outstanding Treasury debt, either owned by the Fed, with corresponding reserves held by the public, or owned directly by people.*
    But this Fed versus Treasury business, while important inside baseball for Fed independence and the general function of the country’s economic plumbing, is really beside the point. The important point now is that the Fed and Treasury right now are, together, printing up trillions of dollars—$4 trillion to $6 trillion is the current guesstimate, which assumes a short, sharp recession—and handing it out”

    How the Fed plans to pay the country’s bills
    The central bank and Treasury are printing trillions of dollars Chicago Booth Review

    Of course Oznabrag, if we can get you and your party to step over to the Paleoconservative side of the fence, we can just dispense altogether with this pesky globalism stuff along with the demands of global investors and instead guarantee US dollars with American mined Gold and Silver...
    "Deconstruction is not a method, and cannot be transformed into one" Jacques Derrida (19302004)

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