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But the broad middle class putting cash under a mattress is not going to cause deflation. They will still need to buy what they need day to day. And still have credit card and mortgage debt, which becomes more attractive at lower rates.
I think the middle class will by and large find better places to place their disposable income and savings than a bank deposit or mattress.
What we are seeing is a bifurcation of rates between the Fed's phony rates and the real private sector rates. Private sector rates are actually on the rise in many areas as credit card interest rates are almost at all-time record highs. Negative interest rates on the Fed side of things is really just a wealth transfer robbing savers and rewarding speculators. If the average person had any knowledge of basic finances they would be in the streets over the black hole prospect of negative rates. Unfortunately the average person knows more about gender identity these days than basic finances. Just what the powers to be want.
The unfunded liabilities for the Euro-States for their healthcare and pensions is unsustainable and no amount of taxation will fix the problem.
For example, Germany claims its unfunded liabilities are only 80% of GDP, but a number of independent sources say differently. The Market Economy Foundation puts it at 228% of GDP and the EU Central Bank says Germany owes 276% of it's GDP.
The Euro-States will have to cut healthcare spending, which means people won't get healthcare and slash pensions. Those liabilities range from 75% of GDP for Britain --assuming they're telling the truth -- and 300% for Italy (who is telling the truth).
France has already slashed its pensions from 50% to 37.5% and will have to cut those further to at least 32.5% if not 28%.
But...they do have money.
That money is in the form of US treasury securities.
What do you suppose will happen if the Euro-States start dumping their US treasury securities to get cash to pay for healthcare and pensions?
Can you say rampant Monetary Inflation?
Um, the government does print its own money.
You seem to be totally ignorant of the process.
The process is simple:
1) Government spends in excess of what it collects in revenues;
2) The excess occurs monthly
3) The federal reserve packages the deficit as marketable securities and sells them
4) That process prevents Monetary Inflation from destroying your life and your economy.
If you remove the Federal Reserve from the equation, nothing different happens.
1) the government does nothing and rampant Monetary Inflation destroys your life and your economy; or
2) the government directs the US Treasury Department to package the deficit as marketable securities and sell them, which is exactly what you do now; or
3) the government borrows money from private banks who also package the deficit as marketable securities and sells them
So what's different?
You have a spending problem and both Parties are responsible for it (and irresponsible).
It's not the fault of the Federal Reserve if Congress can't balance the budget. It's not the fault of the US Treasury Department and it's not the fault of any other entity, except Congress.
It's also the fault of Presidents, because they can veto the budget bill and demand that Congress act responsibly and hold Congress accountable, but none ever have.
And it's your fault, because you keep electing the same morons.
So are you an anarchist yet or just haven't found the "right guy" to vote in?
You are correct. I should not have said MOST. Still, China holds a good percentage of it and due to the trade deficit holds an increasing percentage of it relative to the other holders.
You are correct. I should not have said MOST. Still, China holds a good percentage of it and due to the trade deficit holds an increasing percentage of it relative to the other holders.
China holds less than 6%. What are you taking about?
What we are seeing is a bifurcation of rates between the Fed's phony rates and the real private sector rates. Private sector rates are actually on the rise in many areas as credit card interest rates are almost at all-time record highs. Negative interest rates on the Fed side of things is really just a wealth transfer robbing savers and rewarding speculators. If the average person had any knowledge of basic finances they would be in the streets over the black hole prospect of negative rates. Unfortunately the average person knows more about gender identity these days than basic finances. Just what the powers to be want.
Credit card companies seek profits, so of course they will charge as high as markets will bear.
The Fed/central banks setting rates is nothing new and necessary for adjusting proper monetary policy.
So obviously with such low rates our Fed/central banks have more on their minds than profits. They have economies to help manage as well.
I think the average (at least older) person has had some financial knowledge for some time, and has done better by investing money in the markets vs holding in savings account. I think the average person knows that low interest rates tend to favor equities.
You are correct. I should not have said MOST. Still, China holds a good percentage of it and due to the trade deficit holds an increasing percentage of it relative to the other holders.
Not so. China has not been accumulating Treasury debt for some time now.
More revenue goes towards servicing the debt than providing gov services.
But then we would just take on more debt to pay for servicing the existing debt.
What stops us from taking on more debt?
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