Posted on 10/07/2013 9:19:14 AM PDT by Nachum
While the world's largest hedge fund, the Fed, may not care about the performance of its "bad bank" assets, and thus is largely ambivalent if the US Treasury defaults on the $2 trillion in US paper held by Ben Bernanke, others don't have the luxury of merely printing away any incurred MTM losses. Such as America's largest foreign creditor China, which at last check held at least $1.277 trillion in US Treasurys, which after realizing with a substantial delay that the US Congress is not precisely a "rational actor" and its bonds may be materially impaired in the case of a technical default, is starting to panic. In an oped in the largest media publication, China Daily, vice finance minister Zhu Guangyao, warned that the "clock is ticking" to avoid a US default that could hurt China's interests and the global economy. Somehow we doubt Boehner or Obama are particularly concerned about what happens to "Chinese interests." Of course, if China so wishes, it can pen an Op-Ed in the NYT and tell the US just what will happen if $1.3 trillion in US Treasurys were suddenly to be dumped in a liquidation fire sale.
More from BBC:
China, the US's largest creditor, is "naturally concerned about developments in the US fiscal cliff", vice finance minister Zhu Guangyao said.
He asked that "the US earnestly take steps to resolve" the issue.
Mr Zhu said that China and the US are "inseparable". Beijing is a huge investor in US Treasury bonds.
"The executive branch of the US government has to take decisive and credible steps to avoid a default on its Treasury bonds," he said.
"It is important for the US economy as well as the global economy."
(Excerpt) Read more at zerohedge.com ...
You've bought the BS. Revenues to the FedGov™ comes in everyday. RAISING THE DEBT CEILING HAS NOTHING TO DO WITH PAYING INTEREST ON THE DEBT AND DEBT INSTRUMENTS.
You are really dangerous always spreading lies and BS.
Got no sympathy for them.
Please compare the economies of Texas and California.
One has a better tax environment and lower regulations. The other one has a worse tax environment, arbitrary government and punitive regulations.
Corporations are happy to move their capital to Texas, but they flee from California like it’s on fire.
Now imagine what would happen if the whole of America was like Texas.
The huge debt is just the result of the problem.
The underlying problem is, even if we default—as long as we have Democrats and a GOP willing to `wink & nod’—we could have a zero debt balance but before too long we would be back again deep in the red.
The problem is irresponsible spending and failure to budget by the feckless executive and legislative branches.
Never trust a junkie or a pol with a US checkbook.
Not really what I am advocating but it is true nonetheless! They have stolen and been given our intellectual property for some time. It has value. That is why I think they buy most of our debt in the first place. To maintain this flow of value which I believe has been positive towards them overall. Yet we have placed no value on this loss.
A little tip for you, Mr. Zhu.
Pay no attention to our mainstream media.
How come no one but freepers seem to understand the concept: "You can't spend more than you earn?"
What would be nice is, assuming it was followed, a Constitutional Amendment to the effect of:
Fiscal Responsibility Amendment
Section I
The power of Congress to regulate the value of the dollar is hereby repealed.
Section II
The value of the Dollar shall be one fifteen-hundredth avoirdupois ounce of gold of which impurities do not exceed one part per thousand.
Section III
To guard against Congress using its authority over weights and measures to bypass Section I, the ounce in Section II is approximately 28.3495 grams (SI).
Section IV
The Secretary of the Treasury shall annually report the gold physically in its possession; this report shall be publicly available.
Section V
The power of the Congress to assume debt is hereby restricted: the congress shall assume no debt that shall cause the total obligations of the United States to exceed one hundred ten percent of the amount last reported by the Secretary of the Treasury.
Section VI
Any government agent, officer, judge, justice, employee, representative, or congressman causing gold to be confiscated from a private citizen shall be tried for theft and upon conviction shall:
a. be removed from office (and fired, if an employee),
b. forfeit all pension and retirement benefits,
c. pay all legal costs, and
d. restore to the bereaved twice the amount in controversy.
Section VII
The federal government shall assume no obligation lacking funding, neither shall it lay such obligation on any of the several States, any subdivision thereof, or any place under the jurisdiction of the United States. All unfunded liabilities heretofore assumed by the United States are void.
Section VIII
The federal government shall make all payments to its employees or the several states in physical gold. Misappropriation, malfeasance and/or misfeasance of funds shall be considered confiscation.
Zhu Guangyao - the vice Finance Minister of China - has written an op-ed about the prospect of American default. If you want to find out more, please cast your eyes up to the start of the thread. There you will find an article which mentions this startling and arresting fact.
Someone needs to explain to the Chinese Government that there's no chance of default. Unless they do, events may well pan out exactly as I have described.
Prove to the Chinese government that they don't need to worry about default.
Explain to them - for instance - that the buying power of the dollar hasn't been going down 7% a year for at least the last decade, that the debt-ceiling is merely Kabuki theater, and that all of those apparently serious articles about creating a trillion-dollar coin to pay America's debts were just poorly understood jokes.
We don't know what kind of payment default they fear. A Russian-style repudiation? An Argentinean-style devaluation? Zimbabwe on the Potomac?
But they evidently fear it. Otherwise Zhu Guangyao - the vice Finance Minister of China - wouldn't have been given the job of raising a red flag.
My bet is that they will buy Gold until the fear goes away. So, good luck with that.
I think perhaps they’re needling Obama, piling on so to speak.
China might be third in line, but their opinion matters enough that I expect both sides of the aisle to fall in line.
Nice! You’ve done your homework.
Where you mention “d. restore to the bereaved twice the amount in controversy.” - better make sure that this repayment is made in weight of 0.9999 Gold: not in fiat vouchers printed on behalf of the Federal Reserve.
Otherwise you know what will happen.
Also - same rules for confiscation of Silver.
MUST READ: DEBT CEILING A DEMOCRAT RUSE The debt ceiling propaganda is a radical ruse by obozo and his minions to try to force the Pubbies into a cave in on obozocare and push America that much further into the Marxist hellhole obozo promised his ignorant supporters in 2008! Raising the debt ceiling WITHOUT reigning in SPENDING and telling those “non-essential” bureaucrats to get REAL jobs (if they can find them) is a recipe for the further destruction of what remains of America. If he takes us into default, it will be because HE made the decision to do so. FACT: We are nowhere near that even with a complete budget stall. The US takes in nearly $250 BILLION in tax revenues each month. This is more than 10 times what is needed to service the interest on the debt ($220BILLION/year). What this shutdown does, however, is force Obama into a position where he would have to prioritize the spending for what is left. It would NOT be the total chaos being pushed by the Dems and their lapdog media. If you want your country back, ignore these phony scare tactics. PLEASE SHARE THIS WITH EVERYONE YOU KNOW. Don’t bother with the obozombies. They wouldn’t recognize a fact if it bit them on the ass.
Fortunately you guys have the trump card of ‘Eagle Diesel’.
That will (eventually) make the Saudi’s sing small, and also make even the US debt somewhat manageable.
But the Socialists can still wreck things. I hope and pray that America doesn’t devolve into a mere extraction economy (with a hollowed out middle-class and its own Democrat/Bankster analogy to the toxic Saudi princes).
I don't believe it: however China is clearly worried. Or maybe it's just one lonely disavowed maverick: Zhu Guangyao - the vice Finance Minister of China.
America could pay off its debts tomorrow by typing some numbers into a computer. The buying power of the dollar would plummet, and China's debt would have effectively have been defaulted on.
I think they're most worried about a slow-burn version of that scenario. Watch as the Gold price reflects that.
Hear! Hear!
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