Posted on 08/25/2026 8:52:49 AM PDT by ransomnote
Financelot
@FinanceLancelot
Scott Bessent is choosing to fight the WW3 currency battle now because the 2020 lockdowns forced the entire world to enter the same 5 year debt cycle.
Global debt is financed in Dollars.
Every home, business and nation loan that was taken out in 2021-2022 now must be rolled over at significantly higher rates.This will compound the Dollar shortage at the precise moment Scott Bessent is threatening to cut off financial institutions and nations from the supply of Dollars.
Starving a nation of Dollars forces them to liquidate their forex reserves, including U.S. treasuries significantly below the face value as they face sovereign debt crises.
This will allow the U.S. to buy its own debt for pennies on the Dollar and take it out of circulation.
ransomnote: Grok was asked if the reasoninging in the post is valid. Grok's response posted below.Financelot
@FinanceLancelot
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14h"You described this as economic D-Day, why not impose the sanctions today?"
Scott Bessent: "Why would I want to blow up the global financial system?"
"If people don't want to meet our expectations, then they should expect to leave the Dollar system."
Dollar shortage anyone?
Grok
@grok
6hBessent's Aug 24 quotes on Iran sanctions and the dollar system are accurate. COVID debt created a refinancing wave now at higher rates, with much EM debt in dollars that can tighten shortages under stress. Forced reserve sales can discount Treasuries, and buybacks retire them. But the deliberate "WW3 currency battle" timed for pennies-on-dollar US purchases is speculative without supporting evidence.
It’s all a double edged sword. It gives you a lot of power but it enables the insane spending congress has engaged in for 50 years.
Playing games with that debt brings a sudden stop to your ability to borrow because the people buying your bonds can never be sure they will get their money back. Deficit spending becomes a lot harder.
At some point it will become inevitable, the other hard part will be a sudden decline in lifestyle for most people.
What was that book called?
This is not true. Many such loans are long-term.
Yeah, like 98 pennies to the dollar.
“In Trumps last term, he was rumored to defaulting on our debt to the Federal Reserve....in other words, declare a sort of “ bankruptcy” and renegotiate or default on what we owed to the Federal Reserve.”
Well, Trump did that in his private real estate business, so he has experience.
Iran doesn’t hold any us treasuries, so this article is null and void.
From AI...
“Iran does not hold significant amounts of U.S. Treasuries, as it has been systematically reducing its reliance on U.S. debt amid geopolitical tensions. The exact figures are not publicly detailed, but Iran’s focus has shifted towards other assets like gold. “
Printing money, buying unsold debt to be paid back with what? Your own fiat currency? That is a snake eating it’s tail.
I have thought for a long time it is all a house of cards but some know it and play anyway. It really does not matter though, it has collapsed already.
Really?
Yeah, but realize it could be well over 90 pennies to the dollar.
Overseas holdings of federal debt are estimated just under 10 trillion dollars.
This sort of shell-gamery is one reason why any person with sense and integrity is very much put off by financiers and their manic lying.
At any rate, Milei had to do some of this legerdemain to help Argentina from going off the cliff into the abyss.
Seems to be having some success, therefore we SHOUD be mimicking him, yet we most certainly will not, as is par for the course in US Government finances.
D*C#h&@ds of a very educated variety have for DECADES sworn that the national debt was nothing but an ethereal, economic, academic, construct that had nothing to do with real debt.
The High Priest of this #0r$e$#*t was John Maynard Keynes, the 'brains' behind fiat currency printing/spending and running up astronomical national debts unto collapse.
He was the Confessor to Roosevelt and many other New Deal gurus and nitwits. He was the Pope of every university economics department in the United States for the past 90 years or so.
So everyone in economics, and anyone who took Econ 101, believes that you can just run up public debt to ridiculous, astronomical levels, and somehow it is all perfectly OK because the debt really doesn't exist.
Yes this is insanity but it is polished, leatherbound, lectured, and agreed-upon, official, even timeworn insanity, therefore it carries with it the respectability, weight, and timbre of the most momentous intellectual ideas, like Maxwell's Equations or the Principle of Relativity.
Now back to reality: We need to snap out of it and realize that all the lies of Keynes and the Nobel economists (with very few exceptions) are just total bu11$#*T. We are on the verge of an American hyperinflation and collapse, leading to the world ditching the Dollar forever as serious currency for international finance. It is a nightmare and a ruin that we are right now dipping our feet into and foolishly seeming to like.
But if anyone is willing to do anything, basically the acceptable methods of trying not to be destroyed by this situation are "to restructure" (= "to cheese out of") our debt in part, to STOP OVERSPENDING IMMEDIATELY, and to start retiring debt by means of all the neoplastic economic productivity growth that is supposed to accompany the AI Boom, thus bootstrapping us out of this impending catastrophe and collapse.
Frankly, I can't see how the average person's asking ChatGPT to make a picture of his family cat playing poker among the traditional bowler-wearing, cigar-smoking dogs, is going to help us much in the productivity department.
But that is Bessent and POTUS's story, and they are sticking with it.
always smart to buy back debt at a discount ... it’s also smart to keep your powder dry until the right moment: Bessent claims he’s got a trillion dollars to do this ...
“No matter that this has been coming since Nixon...”
I must be the only one who remembers the question and the answer when Nixon took away the gold backing the dollar. Someone asked an economist what would keep the Fed from just printing off money without constraint.
He said it could but it would not “based on the sure knowledge it would destroy the dollar and the economy.”
always ask
does “pennies on he dollar” mean 98 pennies on the dollar or 2 pennies on the dollar ?
High finance is hard to understand for normal people.
The world’s been on a ‘charge card’ spending spree for some 50+ years since going off the Gold Standard. Now it’s time to pay the piper.
1970s Central and other bankers: “It seemed like a good idea at the time.”
Hows about buying back $40 trillion dollars of debt for $400 Billion dollars of debt.
I have thought for a long time it is all a house of cards ….
————-
It is, do realize in September/ October another $7 trillion comes due and the US has to find buyers for that. They won’t. The US will have to buy that. J six pack has no idea that means…..interesting times dead ahead.
That said, those in the know can prosper.
I’m a rube. I never have figured out how to make money out of this kind of chaos. I do know enough not to panic and to keep my powder dry.
In the main, I hate bonds and debt of any kind either to give or receive it. I’d never make a banker.
In the General/Chat forum, on a thread titled Starving a nation of Dollars forces them to liquidate their forex reserves, including U.S. treasuries significantly below the face value as they face sovereign debt crises. The U.S. can buy its own debt for pennies on the $ and take it out of circulation., Karl Spooner wrote: Very bad idea from a desperate US. BRICS is already picking up a lot of countries just to escape the Trump's insane whimsical sanctions policies. Instead of spending trillions on our forever wars we should be planning and spending that money on revitalizing American industry to at least rival China instead, but no, we are planning to have a war with China to subdue them that way. But of course our military congressional complex who line their banks accounts with our tax dollars wouldn't like the peaceful way.
Trump is way ahead of you on vitalizing American industry. He spoke with Carney about the fact that America wants to make its own cars, it's own steel etc. The man who runs the program 'Dirty Jobs' proposed a plan years ago to train Americans in the trades - an apprenticeship/journeyman pathway; he recently received word from the Trump Admin that his program has been picked up, and he's been asked to lead it. Across the board, Trump is working to bring jobs home.
Trump's tariff strategy is another way Trump is bringing jobs/manufacturing home. For decades foreign competitors siphoned money off of America through their unfair tariffs and when Trump cut them off, dependent countries were hardest hit. I was puzzled to read that some name brand cars (e.g., BMW) had fallen off in quality dramatically in the last year or two and looked into it online.
It appears Europe used tariffs on American products to prop up European industries which could not have competed with US manufacturing otherwise. NATO countries couldn't have established name brand recognition for products without money from their unfair trade practices (tariffs, quotas etc) and other types of skimming. Trump kicked away the props and quality in some countries and industries came crashing down. With BMW sales stumbling, Germany is set to lose more money, at a time when it and other NATO countries are too poor to maintain a sufficient military. Meanwhile, Trump's tariff program ensures there are more manufacturing jobs and cars produced in the US.
His programs to reinvigorate the job market and America's capacity to manufacture or otherwise produce what she uses are deep and across the board. Trump isn't 'planning to have a war with China'. He's building America to outcompete China. The screaming you hear is those who are hardest hit.
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