what was before JPM?
Posted on 05/08/2016 5:20:55 PM PDT by RayofHope
Presumptive Republican presidential nominee Donald Trump just revealed an inconvenient truth about U.S. debt, the outspoken and often controversial Peter Schiff told CNBC in a recent interview.
Last week, Trump joined CNBC's "Squawk Box" last week to discuss a wide range of topics including U.S. debt, interest rates and replacing Fed Chair Janet Yellen. It was Trump's comments about potentially renegotiating the more than $19 trillion in U.S. debt and the sensitivity surrounding higher interest rates that raised eyebrows.
While some observers argued that Trump's approach could be tantamount to a debt default, Schiff told CNBC the GOP nominee was fundamentally correct in his observation.
(Excerpt) Read more at cnbc.com ...
The treasuries may pay out only 2% or 3% but the treasury bond holders can make far greater returns on the secondary markets.
Hedge fund managers can take the securities into their margin accounts and leverage them 20 to 1, 40 to 1; the return is massively larger.
A large part of Wall St. is about leverage.
Piece of cake!
That's just the ENTIRE U.S. budget for 10 or 12 years, and zero additional government spending.
Which, of course, means zero public employees of any kind (including elected ones.) Thus no new debt, other than the compounded interest on the slowly declining balance.
They hold the debt instruments, but they also are giving us the greater haircut in other ways - which Trump has been pointing out. He states we have a LOT of leverage with them. I believe he COULD convince them that it is in their interest to accept cents on the dollar. Much in the same way Mexico is realizing that yes, in one way or the other, it WILL pay for the Wall.
“Why not laddered corporates instead?”
I came to that conclusion 5 years ago. So far it has worked out well. The same with investing in dividend paying stocks of companies with strong brand franchises and a 20+ year history of increasing dividends.
what was before JPM?
The Social Security Trust Fund is the largest holder of our national debt:
http://useconomy.about.com/od/monetarypolicy/f/Who-Owns-US-National-Debt.htm
I'm wondering if you are simply misinformed or an outright liar.
Trump has owned many, many corporations. IIRC, 4 of them have gone bankrupt. Trump himself has not. If you make a practice of buying distressed companies and have a few that don't make it, only a fool or a liar would spin it as "he goes bankrupt too often"
"...Why in the he!! would any responsible lender reduce principle?..."
There are all kinds of reasons why a lender would accept a discounted payoff. Maybe the loan is at a lower interest rate that the current rates and they want their money back to re-lend it at the higher rate. Or because they might have a need for their money earlier than originally planned.
When I retired my mortgage of $34,000 for only $20,000, the LENDER CALLED ME and asked if I could pay the loan back early because they needed their money for another purpose. I agreed to pay the loan off early but I didn't have the whole $34,000. So we negotiated a mutually agreeable payoff amount of $20,000. I was happy. They were happy. The world didn't come to an end.
And as for you being "old" school about things, I am seventy years old and people have been doing these business negotiations and transactions forever. This is not some "new" scheme as you seem to think it is. Again, it's obvious you do not understand the reality of the lending business. You're arguing from your narrow, uniformed point-of-view. Reality is not what you wish it to be.
Trump made the right call when he said he would negotiate with China for a discounted payoff. China's economy is hurting now too. They might see our economic situation as shaky and want to get some of their money back to help their own economy. If they could be persuaded to trim, say $500 billion off the total owed, everybody in the US would be cheering Trump for saving the US so much money.
Everybody but you, apparently. You would be hanging you head in "shame" for some reason.
There is an ebb and flo to business world. It is not static but very dynamic.
Sounds like a leader with good negotiation skills! Why is it okay for the US to ask other countries to restructure (forgive) debt to countries in a financial crisis? How much debt has the US encouraged other countries (including the US) to forgive over the last 20 years? Love him or hate him Trump is correct. The day is coming and we might as well get in front of it.
Our problem is we keep spending and kicking the past spending can down the road. The democrats are not going to address it and obviously the Republicans are not going to address it so maybe Trump can try it done.
That’s Kimberley Amadeo’s opinion which is following the unaudited releases of the Fed. She has no way to verify if the information is true. She is not an authority and her statements reveal confusion.
She can’t keep her terms clear and she contradicts herself:
‘When the Federal Reserve buys these Treasuries, it doesn’t have to print money to buy them. It issues credit and puts the Treasuries on its balance sheet. Everyone treats the credit just like money, even though the Fed doesn’t print cold hard cash.”
“The Fed doesn’t buy Treasuries directly at auction. Instead, it purchases them from its member banks.It does this through an office at the Federal Reserve Bank of New York.’
The Fed buys Treasuries? The Fed doesn’t buy Treasuries?
She does this throughout. She is merely toting the Fed’s narrative.
What does ‘printing’ have to do with computer creation of digital funds? What does it have to do with anything about the subject of debt holdings? She’s talking to an audience of high schoolers. She is not to be taken seriously.
The Fed is a master at putting out bubbles in funds and directing attention to red herrings in press statements. The press releases of the St. Louis Fed are designed to persuade the lay public the Fed knows what it is doing when in fact Fed related persons do not even know what it happening within itself.
The SS Trust holds no treasuries at all. To say it holds such is analogous to saying GE Appliances Division holds GE Corporation bonds for GE Capital. It is a ledger entry and not part of the treasury debt. Social Security now takes in less revenue than it pays out in SS payments and the gap is growing. The SS Trust Fund has no funds to purchase treasuries.
Amadeo says the Fed ‘removes’ treasuries but that is a red herring. The Fed cannot remove treasuries when they create the funds by which the market purchases treasuries, and they create the funds faster than they receive treasuries as payment for the funds they create. Make them more valuable? Amadeo is so wrong that to quote her on anything is as ridiculous as quoting Chris Rock on the origins of the universe.
To quote real experts in the matter of bonds, start with Ray Dalio, and like persons. Beware of such bond aggregators as Bill Gross because he has to be careful in his statements so as not to cause a media meltdown of his investor’s holdings, i.e., he’s not free to speak plainly. He is on a glide path to dump all US treasuries which is the telltale sign of what he really thinks.
Quit reading Amadeo as if that is gospel. Spare us the high school lectures of Fed fantasy writing. They are not to be trusted. There is a reason why Trump has called for auditing the Fed and it’s not because they are performing forthrightly. They are manipulators, liars like the Clintons where they look for a good narrative to latch on to, one that will both confuse the public and shield them from disclosure of their malfeasance and incompetence.
Bank of North America; First and Second Banks of the United States; Free banking and National bank eras;
Getting rid of the Fed just brings back the threat of panics and collapse that can spread like a virus. JP Morgan acted as the defacto central bank but the job was becoming too large for them by 1907. And of course people were highly suspicious of a single private bank wielding that much power.
Those are ‘special issues’. They are complying with the ‘law’ that was passed during the late 1990s when all the rage was about a Social Security ‘lockbox’. Again this is the con they pull (political members).
The SS Administration has to know they are complying with the law because they are bureaucrats and are not sophisticated enough to think as clever con artists. The law is subverted outside their realm. They are not allowed to buy treasuries on the open market, they receive a ledger entry as part of their compliance.
There is no interest paid on the special issues. It is all compounded into an unfunded liability which is not part of government operations.
The trillions of annual debt that the Obama Administration has embraced with approval from Congress does not include ledger entries of special issues between the Fed and the SS Trust Fund. The trillions are derived from open market purchasing.
The open market purchases are today mostly domestic purchases from Fed policy to member banks (including mutual funds) to bond traders. This is the debt that is in focus.
There are far more trillions that go offshore but which are not on the books that the Fed presents to Congress.
They were previously good ole treasuries, they are now treasuries rebranded!.........
They are not negotiable meaning they cannot be traded and have no market value. In other words, they are meaningless.
Their only value is the backing of the full faith and credit of the United States. But that backing is growing more and more precarious.
Trump will not touch them, he will have the SS Trust solvency in mind when his plan takes action. He wants to save SS for all Americans.
I do believe Trump has the best interests of SS recipients at heart. Whether the old treasuries or the new treasuries, there was never any intention on the part of our government to reimburse the SS fund. A total scam from the get-go!
Here’s where you can find that list of Hillary’s pay checks from speaking: http://thefederalistpapers.integratedmarket.netdna-cdn.com/wp-content/uploads/2016/02/Hillary-Clinton-Speeches-2013-2015_1.jpg
[Click once on the picture when you open it, then it enlarges and is readable].
what happened when the US Govt used to print it's own money before it was co-opted
“what happened when the US Govt used to print it’s own money before it was co-opted “
The government printed its own money as the US Note issue, aka Lincoln’s Greenbacks. That resulted in inflation and a suspension of the gold standard for a decade.
The government still prints all of our currency at the Bureau of Printing and Engraving.
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