Obama is not worried about our Nations credit rating

[Magox]

Bill Gross, manager of the world's biggest bond fund, warned on Thursday the United States will eventually lose its top AAA credit rating, a fear that had already spooked financial markets on Thursday and could keep the dollar, stocks and bonds under heavy selling pressure.

 

The United States will face a downgrade in "at least three to four years, if that, but the market will recognize the problems before the rating services -- just like it did today," Gross told Reuters.

 

President Barack Obama isn’t concerned about “a change in our credit rating.”

 

This is what Gibbs said today in response to fears of losing our nations treasuries credit rating.

 

 

 

 

Good to know

 

Well, if he's not worried, I guess we shouldn't be worried

[VABills]

Why should he care. he'll probably move back to his childhood home in Indonesia after he finishes screwing this country.

[Magox]

Just to expand on what the consequences if our nations credit rating drops.

 

Right now US treasury bonds are seen as quite possibly the safest investment in the planet. It is issued by the US treasury, and much of the money that is invested in these treasury bonds are used to pay for many things that the government are looking to do, for instance, our stimulus packages, TARP and other spending measures.

 

China as you know is our largest creditor nation, they hold over $740 Billion dollars in US treasuries. We depend on them very heavily, and even more so now because of the situation that we are in. Without China's and other countries purchases of our treasuries we wouldn't have the money to fund all these bailouts, stimulus packages and etc. (unless the federal reserve steps in, which they have)

 

Recently Chinese officials and their premeir Wen Jiabao stated that as the largest creditor nation of the United States, China is concerned and "worried" about the security of its assets, and requested that the United States keep to its word, abide by its promises, and ensure the safety of China’s assets, mainly US treasuries. Of course on the same day, a White House spokesmen said that the United States is the world’s safest investment, in order to emphasize the safety of Chinese investments in U.S. national debt.

 

Since the Chinese are not able to suddenly pull out of their US Treasury investments, because of the symbiotic relationship that they have with us, and knowing that it would have negative consequences on their own long term future, the Chinese have actually taken action on their concerns and have signed currency swap lines with now 7 different countries within the last 5 months in an attempt to boost the role of their currency the yuan and bypass the use of the dollar. Meaning that other countries that they signed these currency swap lines will now start purchasing Chinese goods in Yuan as opposed to the dollar. In essence this is a first big step in diminishining the role of the Dollar as the worlds reserve currency.

 

The reason why the US is at risk of losing it's credit rating is because of the tremendous debt that we are accumulating without the prospects of being able to pay it back. I do believe it is unlikely that we would default on our payments, simply because we have the federal reserve that could come in and just print money to repay our debt, which of course would have other consequences that we would have to deal with.

 

In a report on May 9, S&P rival Moody's reaffirmed its stable rating on the United States but warned that "if the current upward trend in government debt were to continue and become irreversible, the rating could come under downward pressure."

 

I've mentioned this in the post before, but I believe it is worth repeating, Bill Gross, manager of the world's biggest bond fund, warned on Thursday the United States will eventually lose its top AAA credit rating, a fear that had already spooked financial markets on Thursday and could keep the dollar, stocks and bonds under heavy selling pressure.

 

The United States will face a downgrade in "at least three to four years, if that, but the market will recognize the problems before the rating services -- just like it did today," Gross told Reuters.

 

This guy doesn't just say things just for the sake of hearing his own voice, he moves markets, people respect him, and I believe what he is saying to be true.

 

So here are the consequences:

 

1) It would lead to higher rates across the board. People would dump treasuries, which in turn would raise rates, therefore stunting any growth prospects.

2) The Federal Reserve would step in, and they would buy more treasuries, just like they are doing right now, but would be forced to buy even more to try to bring down rates. This would be a very very costly dilemna. The Federal Reserve has all ready earmarked $1.75 Trillion dollars to buy our own debt and Mortgage Backed Securities in an attempt to provide added liquidity and bring down rates. A down grade of our Nations Ratings would spark panic and fear, and many investors would dump treasuries.

3) Investors dumping treasuries would have a severely negative impact on the dollar, since Treasuries is a US Asset that is denominated in dollars, it would create an erosion of demand on US dollar denominated assets which in turn brings down the value of the dollar.

4) It would spark a tremendous sell off in US Stocks, as we saw a precursor to that on Thursday of this past week, which of course would have an obvious negative impact on shareholders, investor sentiment and destruction of wealth across the board.

5) It would be a huge psychological blow to the nation, it has always been widely assumed that the United States would never lose its perfect credit rating. This would bolster China's position in creating a new world reserve currency and would further give them incentive to increase the role of their own currency the Yuan.

6) This in my view would spark the Middle east in wanting to create their own currency, much like the Euro. This has been in the works, they as well are very reliant on the US dollar because of all the Oil revenues that they receive in US dollars. Basically they would be importing major inflation by accepting dollars. This is in the works, and a credit downgrading of our sovereign debt would give more incentive for them to move forward with this. Which of course would have serious negative consequences for the US dollar.

 

To sum up, the federal reserve would be forced to step in, and at the end of the day would be one of the only few buyers of our own debt. Talk about costly, it would be disastrous.

 

Inflation is going to go through the roof, you can bet on it.

 

Of course the Obama administration is trying to downplay these fears. By saying they are not concerned “a change in our credit rating.”

 

This is not the time to be accumulating more debt, the money that we are pouring into AIG, Chrysler/GM and many others is money that we will most likely never recuperate again. This $632 Billion dollar "down payment" on health care reform is not something that the administration should be venturing into at this point, specially considering that it is very likely that it would be a plan that may not work.

 

This administration seems to think that the solution to all the problems is throwing good money at bad projects and business models. Shouldn't history be a good tool in trying to figure out what works and what doesn't?

 

Doesn't Japan of 1990 and the "2 lost decades" offer us something to go by? A bad business model is a bad business model, and if you allow and enable a bad business to stay alive by recapitalizing it and then expect for things to improve, I would think that to be extremely foolish.

 

The reason why our credit rating is being considered to be downgraded is because of all this debt that we are accumulating. This administration just doesn't get it! I have never felt more passionate about our economy than now. People are being fooled into believing what they are being told from the grand maestro of words.

 

The administration believes that all this spending, healthcare reform, bailing out banks, auto companies will revive the economy on a sustained basis. They believe that with their "rose colored" glasses approach, that the economy will come roaring back and that tax receipts will increase helping to pay down our debt.

 

They are wrong!

 

Like I said earlier, the Obama administration say they aren't concerned with the possible downgrade of our Nations credit rating, I just hope that they are.

[outsidethebox]

I can't believe this nations credit isn't already in the toilet! If you ran your household like the govt runs this country, who would give you a loan?

 

A thought I have had recently considering the move by Golisano, how long before we see the real money in this country high tail it out of this country and leave us with this huge mess? Has it already begun? Are we headed to third world status?

[finknottle]

I can't believe this nations credit isn't already in the toilet! If you ran your household like the govt runs this country, who would give you a loan?

 

Just because we spend like a drunken sailor doesn't mean we have not been paying for what we buy. We make our payments on time, and that is all that a creditor cares about - we are a great customer, hence the great credit rating. They don't care about whether we spend responsibly.

 

The rating won't change until they decide we simply can't sustain any more additional debt, or we start talking about default.

[IDBillzFan]

The rating won't change until they decide we simply can't sustain any more additional debt, or we start talking about default.

Or when the president himself tells the world that our debt load in unsustainable.

 

Well, y'know, unless he thinks the reason the country's debt is so bad is because of the existing health care system.

 

“Most of what is driving us into debt is health care, so we have to drive down costs,” he said.

 

And here I thought it was the billions we just threw at earmarks. And bailouts. And taking over GM and Chrysler.

 

Silly me.

[Magox]

Just because we spend like a drunken sailor doesn't mean we have not been paying for what we buy. We make our payments on time, and that is all that a creditor cares about - we are a great customer, hence the great credit rating. They don't care about whether we spend responsibly.

The rating won't change until they decide we simply can't sustain any more additional debt, or we start talking about default.

Who is they? If they is China, or they is the ratings agency or if they is any country that accepts Dollars for goods and services, or they are any investors that invest in the U.S then you are dead wrong.

 

You will see, it is going to happen, it is clear that this administration is going to continue to spend, the last administration was so unpopular, and this president is the antithesis to what Bush was, and now we have some of the most liberal spending members in congress that we have seen, that they will push their agenda aggressively because they have the public support.

 

The bottom line is that these guys don't know how to run a business, government should not be micromanaging and dictating how a business operates and that is exactly what they are doing. They are getting their grubby little fingers involved in how the auto, banking and credit card industry should be run. They are dictating how mortgages should be serviced, they are nationalizing healthcare, they are promoting protectionism and demonizing hedgefunds that wanted to participate in funding for some of these programs, just like the Chrysler deal, which was an outright debacle, and I gaurantee you that there will be consequences of that wreckless comment that President Obama had made. http://www.bloomberg.com/apps/news?pid=new...id=amdIziCr6F9U

 

Look at the way they are bullying the GM bond holders, http://www.bloomberg.com/apps/news?pid=new...id=a8gcKnWHJGWk that is absolutely an outrageously unfair deal that the administration is dictating, but of course he is going to win lots of political points because it supports the union workers, who in my view is one of, if not the main reason why the company is where they are today, and he had the gall to blame "speculators" for the Chrysler bankruptcy.

 

‘Waterboarding’ Investors

 

That’s outrageous. The deal is nothing short of a political rip-off, with the Obama administration currying favor with an organized voting bloc in the form of the United Auto Workers union at the expense of unorganized retirees.

 

The current deal “can be seen as one that serves up bondholders on the altar of political self-interest,” CreditSights Inc. analyst Glenn Reynolds wrote in a report last week titled, in part, “Waterboarding Bondholders.”

 

“The powers that be will not face any major constituency risks by screwing some mutual funds, insurance companies, pension managers, and hedge funds (who often manage pension and endowment money etc.) out of their fair and equitable treatment,” Reynolds wrote.

 

Not that you’ll hear much about the rights of these investors if and when the fur starts flying over a GM bankruptcy filing. Instead, we’ll again hear talk about the “money people” -- the label President Barack Obama pinned on debt investors at Chrysler LLC who refused to swallow the terms foisted on them by the company and government officials.

 

Expect the fight at GM to be cast in similarly expedient terms of “working man vs. evil money people,” Reynolds’s report noted. And those who raise objections to the government’s plans “will be dubbed Wall Street holdouts and obstructionists.”

 

Shameless!

[Magox]

Or when the president himself tells the world that our debt load in unsustainable.

 

Well, y'know, unless he thinks the reason the country's debt is so bad is because of the existing health care system.

 

 

 

And here I thought it was the billions we just threw at earmarks. And bailouts. And taking over GM and Chrysler.

 

Silly me.

“We can’t keep on just borrowing from China,”

 

Ok, problem solved

 

 

[Magox]

China warns Federal Reserve over 'printing money'

 

http://www.telegraph.co.uk/finance/finance...ting-money.html

 

China has warned a top member of the US Federal Reserve that it is increasingly disturbed by the Fed's direct purchase of US Treasury bonds.

 

Last Updated: 9:40AM BST 26 May 2009

 

Richard Fisher, president of the Dallas Federal Reserve Bank, said: "Senior officials of the Chinese government grilled me about whether or not we are going to monetise the actions of our legislature."

 

"I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States," he told the Wall Street Journal.

 

 

China calls for the reign of the dollar to end His recent trip to the Far East appears to have been a stark reminder that Asia's "Confucian" culture of right action does not look kindly on the insouciant policy of printing money by Anglo-Saxons.

 

Mr Fisher, the Fed's leading hawk, was a fierce opponent of the original decision to buy Treasury debt, fearing that it would lead to a blurring of the line between fiscal and monetary policy – and could all too easily degenerate into Argentine-style financing of uncontrolled spending.

However, he agreed that the Fed was forced to take emergency action after the financial system "literally fell apart".

 

Nor, he added was there much risk of inflation taking off yet. The Dallas Fed uses a "trim mean" method based on 180 prices that excludes extreme moves and is widely admired for accuracy.

 

"You've got some mild deflation here," he said.

 

The Oxford-educated Mr Fisher, an outspoken free-marketer and believer in the Schumpeterian process of "creative destruction", has been running a fervent campaign to alert Americans to the "very big hole" in unfunded pension and health-care liabilities built up by a careless political class over the years.

 

"We at the Dallas Fed believe the total is over $99 trillion," he said in February.

 

"This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them," he said.

 

His warning comes amid growing fears that America could lose its AAA sovereign rating.

[K-9]

China warns Federal Reserve over 'printing money'

 

http://www.telegraph.co.uk/finance/finance...ting-money.html

 

China has warned a top member of the US Federal Reserve that it is increasingly disturbed by the Fed's direct purchase of US Treasury bonds.

 

Last Updated: 9:40AM BST 26 May 2009

 

Richard Fisher, president of the Dallas Federal Reserve Bank, said: "Senior officials of the Chinese government grilled me about whether or not we are going to monetise the actions of our legislature."

 

"I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States," he told the Wall Street Journal.

 

 

China calls for the reign of the dollar to end His recent trip to the Far East appears to have been a stark reminder that Asia's "Confucian" culture of right action does not look kindly on the insouciant policy of printing money by Anglo-Saxons.

 

Mr Fisher, the Fed's leading hawk, was a fierce opponent of the original decision to buy Treasury debt, fearing that it would lead to a blurring of the line between fiscal and monetary policy – and could all too easily degenerate into Argentine-style financing of uncontrolled spending.

However, he agreed that the Fed was forced to take emergency action after the financial system "literally fell apart".

 

Nor, he added was there much risk of inflation taking off yet. The Dallas Fed uses a "trim mean" method based on 180 prices that excludes extreme moves and is widely admired for accuracy.

 

"You've got some mild deflation here," he said.

 

The Oxford-educated Mr Fisher, an outspoken free-marketer and believer in the Schumpeterian process of "creative destruction", has been running a fervent campaign to alert Americans to the "very big hole" in unfunded pension and health-care liabilities built up by a careless political class over the years.

 

"We at the Dallas Fed believe the total is over $99 trillion," he said in February.

 

"This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them," he said.

 

His warning comes amid growing fears that America could lose its AAA sovereign rating.

 

Screw China! How hypocritical can they be? When it comes to manipulating currency nobody does it better than the Chinese. And before Mr. Fisher lectures me on my role in the current mess, I'd like to know his voting record. How many office holders, past and present, did he help get elected that thought nothing of printing more money and that deficit spending was a good thing?

[pBills]

Why should he care. he'll probably move back to his childhood home in Indonesia after he finishes screwing this country.

 

 

Oh give me a break. You should know that he is taking on many problems created over the last eight years. What did Bush think of the credit rating?

[Magox]

Screw China! How hypocritical can they be? When it comes to manipulating currency nobody does it better than the Chinese. And before Mr. Fisher lectures me on my role in the current mess, I'd like to know his voting record. How many office holders, past and present, did he help get elected that thought nothing of printing more money and that deficit spending was a good thing?

You'd like to know his voting record? Ok, you obviously don't know who Ken Fisher is, he has voted against interest rate cuts when every one else wanted to ease and has been the lone voice of dissent on many occasions. He is known to be a fiscal hawk and is probably one of the few former fed governors over the last few years that has a monetary conservative conscience.

 

In regards to screw China!?!?!?!?!!

 

Are you freakin serious???

 

We need China more than any other nation on this planet. Who do you think is funding our bailouts and stimulus?

 

Basically Tim "vulcan" Geithner basically said the same ignorant thing you just did in his first day at office. Of course, his words had reprecussions felt around the world and he quickly retracted them.

 

We are in no position to be dictating Chinese monetary policies. To tell you the truth, they seem to have a better long term plan for growth and sustained economic stability than we do.

 

You want to know what Buffet thinks about US treasuries, dollar, inflation and China?

 

Buffett believes US Government Bonds are one of the poorest choices for investors today, especially non Americans. As he put it: "Anybody who holds (US) Dollar obligations from outside this country is going to get back less in purchasing power in the future."

 

"You can bet on inflation"

In his view the US is following policies that are bound to have inflationary consequences. Heading these is heavy borrowing from, especially, the Chinese to fund the bailout and stimulus packages.

 

"It's wrong for politicians and others to keep saying they're using (US) taxpayers money. My taxes haven't gone up and neither have yours. What we are doing is borrowing from the rest of the world and building up government debt. The classic way of reducing the impact and cost of foreign debt is by reducing the value of dollars you're going to repay them with." he also added "The people who are really going to pay for the bailouts are those who are buying fixed interest US Government bonds that will be worth less when they redeem them. The AIG bonuses, were actually paid by the Chinese"

[K-9]

You'd like to know his voting record? Ok, you obviously don't know who Ken Fisher is, he has voted against interest rate cuts when every one else wanted to ease and has been the lone voice of dissent on many occasions. He is known to be a fiscal hawk and is probably one of the few former fed governors over the last few years that has a monetary conservative conscience.

 

In regards to screw China!?!?!?!?!!

 

Are you freakin serious???

 

We need China more than any other nation on this planet. Who do you think is funding our bailouts and stimulus?

 

Basically Tim "vulcan" Geithner basically said the same ignorant thing you just did in his first day at office. Of course, his words had reprecussions felt around the world and he quickly retracted them.

 

We are in no position to be dictating Chinese monetary policies. To tell you the truth, they seem to have a better long term plan for growth and sustained economic stability than we do.

 

You want to know what Buffet thinks about US treasuries, dollar, inflation and China?

 

Buffett believes US Government Bonds are one of the poorest choices for investors today, especially non Americans. As he put it: "Anybody who holds (US) Dollar obligations from outside this country is going to get back less in purchasing power in the future."

 

"You can bet on inflation"

In his view the US is following policies that are bound to have inflationary consequences. Heading these is heavy borrowing from, especially, the Chinese to fund the bailout and stimulus packages.

 

"It's wrong for politicians and others to keep saying they're using (US) taxpayers money. My taxes haven't gone up and neither have yours. What we are doing is borrowing from the rest of the world and building up government debt. The classic way of reducing the impact and cost of foreign debt is by reducing the value of dollars you're going to repay them with." he also added "The people who are really going to pay for the bailouts are those who are buying fixed interest US Government bonds that will be worth less when they redeem them. The AIG bonuses, were actually paid by the Chinese"

 

No. I want to know what politicians HE helped get elected. He accuses us of electing officials that had no problem printing money to get out of debt. Did he vote for any of them? Did he vote for politicians who see nothing wrong with deficit spending? That's what I want to know before he lectures me. He may be a fiscal conservative hawk but so were many others since come and gone who had no problem printing money like ink was going out of style and running up ever-higher deficits.

 

And the Chinese? Like I said, SCREW THEM and their hypocrisy! They have no business lecturing us on monetary policy when their practice has been to manipulate their own currency to their own favor over the years.

[Magox]

Oh give me a break. You should know that he is taking on many problems created over the last eight years. What did Bush think of the credit rating?

I was not a big fan of Bush, I think his pigheaded approach he had by classifying other countries on the "axis of evil" had terrible overseas consequences in how other countries viewed us. The decision to go into Iraq was not the right decision and he also failed in oversight in many regulatory issues.

 

But to say that he created this economic downturn is proposterous and ignorant. That is the campaign party line that is being used over and over and was masterfully implented to help get Obama elected. Let's be honest here, any democrat that would of ran this year would of won the election, because of the unpopularity of the Bush administration.

 

This economic downturn goes all the way back dating to the Carter administration. Democrats wanted people of lower incomes in homes, and of course Democrats are the kings of politicians in making decisions to score political points but failing to see the "unintended consequences" of their decisions.

 

Democrats pushed for people to get in homes, and republicans pushed for wreckless wild wild west free market principles.

 

Our treasury secrataries have failed miserably because they come from the school of "profits". They are investment bankers whose business models have failed them and this country, which is why guys like Paulson never saw this coming. "Subprime mortgage market is contained". I will never forget those words.

 

Guys like Greenspan and Bernanke's failed keynesian economic policies also have contributed to where we are today along with the deregulation of many financial products. The Repeal of the GS act was huge contributor to where we are today and that occured before Bush's tenure.

 

The excesses of big business for causing an unstable bubble-like economy is largely to blame for our crisis.

[pBills]

I was not a big fan of Bush, I think his pigheaded approach he had by classifying other countries on the "axis of evil" had terrible overseas consequences in how other countries viewed us. The decision to go into Iraq was not the right decision and he also failed in oversight in many regulatory issues.

 

But to say that he created this economic downturn is proposterous and ignorant. That is the campaign party line that is being used over and over and was masterfully implented to help get Obama elected. Let's be honest here, any democrat that would of ran this year would of won the election, because of the unpopularity of the Bush administration.

 

This economic downturn goes all the way back dating to the Carter administration. Democrats wanted people of lower incomes in homes, and of course Democrats are the kings of politicians in making decisions to score political points but failing to see the "unintended consequences" of their decisions.

 

Democrats pushed for people to get in homes, and republicans pushed for wreckless wild wild west free market principles.

 

Our treasury secrataries have failed miserably because they come from the school of "profits". They are investment bankers whose business models have failed them and this country, which is why guys like Paulson never saw this coming. "Subprime mortgage market is contained". I will never forget those words.

 

Guys like Greenspan and Bernanke's failed keynesian economic policies also have contributed to where we are today along with the deregulation of many financial products. The Repeal of the GS act was huge contributor to where we are today and that occured before Bush's tenure.

 

The excesses of big business for causing an unstable bubble-like economy is largely to blame for our crisis.

 

 

 

Ok, without completely getting into this. I am taking a very basic look at this. Surplus to huge deficit when Bush left office. Yes, there is more to that. I'm just saying that people pinning this on Obama because it's easy and their republican boy isn't in office is ridiculous.

 

If McCain would have won the election I would not have blamed him for this mess.

[finknottle]

Who is they? If they is China, or they is the ratings agency or if they is any country that accepts Dollars for goods and services, or they are any investors that invest in the U.S then you are dead wrong.

 

No, an investor cares only about one thing: if I buy a bond or a treasury note, will I get paid my money? I couldn't care less whether the country is taking my loan to retool factory's or to mow lawns at the Smithsonian. I only care whether it can be expected to continue paying off its obligations up to the time the one I am considering matures.

 

And in that respect, the US deserves the excellant ratings it has had in recent years, despite the ruinous policies. The odds of default within 30 years has always been negligible.

 

The US may default eventually, the question is when. A five year debt is still safe and still enjoys an excellant rating. A 10 year is probably safe. 30 years? Not so much, now, in light of the budget. And that is what you are seeing reflected in the markets.

[Magox]

No. I want to know what politicians HE helped get elected. He accuses us of electing officials that had no problem printing money to get out of debt. Did he vote for any of them? Did he vote for politicians who see nothing wrong with deficit spending? That's what I want to know before he lectures me. He may be a fiscal conservative hawk but so were many others since come and gone who had no problem printing money like ink was going out of style and running up ever-higher deficits.

 

And the Chinese? Like I said, SCREW THEM and their hypocrisy! They have no business lecturing us on monetary policy when their practice has been to manipulate their own currency to their own favor over the years.

Ok.

 

Which politicians did he help get elected?

 

You seem to know the answer. I've been following Ken Fisher for a long time, and I can tell you he is not about "easy" money. You are wrong on this one. This guy is the antithesis of what Bernanke is. Before you opinionate about him any further, I sugges you research him first.

 

About the Chinese!?! HAAAAAAA

 

Who are we to tell the Chinese how to handle their monetary policies? Remember, we are the one's borrowing their money.

[Magox]

No, an investor cares only about one thing: if I buy a bond or a treasury note, will I get paid my money? I couldn't care less whether the country is taking my loan to retool factory's or to mow lawns at the Smithsonian. I only care whether it can be expected to continue paying off its obligations up to the time the one I am considering matures.

 

And in that respect, the US deserves the excellant ratings it has had in recent years, despite the ruinous policies. The odds of default within 30 years has always been negligible.

 

The US may default eventually, the question is when. A five year debt is still safe and still enjoys an excellant rating. A 10 year is probably safe. 30 years? Not so much, now, in light of the budget. And that is what you are seeing reflected in the markets.

You are missing the point. I didnt' say they would default, it's highly unlikely that we would, because at the end of the day, we have the federal reserve. They can print as many dollars as they wish.

 

what investors care about more than anything is their returns on their money. If you buy a treasury today, and all of a sudden people start dumping treasuries, then the value of your bond goes down. If you decide to sell it, you will get back what ever the difference is from where you purchased it and where you sold it + interest earned.

 

So if the US were to lose its AAA credit rating, many investors would sell their bonds, and basically all the people who bought bonds would have the value of their holdings decrease.

 

 

Also, you say they couldn't care less how we spend our money? Did you really just say that? Of course they care, they want to know whether or not the game plan of the US is an economic successful sustained policy. That sort of like if you buy a stock and saying, well, I don't care how Exxon spends their money, because I will just trust them to run their business right.

 

You better know what they are spending their money on, because that helps in the decision process of whether or not you believe it to be a good investment or not.

[Magox]

Ok, without completely getting into this. I am taking a very basic look at this. Surplus to huge deficit when Bush left office. Yes, there is more to that. I'm just saying that people pinning this on Obama because it's easy and their republican boy isn't in office is ridiculous.

 

If McCain would have won the election I would not have blamed him for this mess.

It's ridiculous to blame Obama for where we are today, it is the decisions he is making now that worries me.

 

He is upping up the ante' .

 

Making huge decisions that I am very worried about. I am very worried in the direction we are heading. I believe these policies are wreckless and have huge "unintended consequences"

 

I know I come off as an alarmist, but I am not, I believe that these trillion dollar decisions have huge consequences. To me they seem obvious, and I just can't believe that other very "smart" economists don't see the mess that we are running into.

 

Soon your dollar is going to be worthless. I believe that there is another huge systemic failure looming, and I believe it has to do with the dollar. There are signs all ready pointing in this direction, and when the President of our country says he is not concerned about it. That concerns me.

[K-9]

Ok.

 

Which politicians did he help get elected?

 

You seem to know the answer. I've been following Ken Fisher for a long time, and I can tell you he is not about "easy" money. You are wrong on this one. This guy is the antithesis of what Bernanke is. Before you opinionate about him any further, I sugges you research him first.

 

About the Chinese!?! HAAAAAAA

 

Who are we to tell the Chinese how to handle their monetary policies? Remember, we are the one's borrowing their money.

 

I don't know squat about Ken Fisher. I believe everything you tell me about him. I have no reason to doubt you. But it rankles me when he says we're going to regret electing officials who got us into this mess. That's why I want to know if he ever helped elect the same people. I honestly DON'T know. But until he can tell me he never voted for anyone that helped print all that money AND didn't think anything was wrong with deficit spending, then he is, on the surface, anyways, setting himself up for being labeled a hypocrite.

 

I'm not saying we should tell the Chinese how to handle their monetary policies. I'm saying they're hypocrites for telling us how to handle ours when their track record is bullsh*t.

 

So we borrowed their money. Are they getting paid a return? Did they make a bad investment? What happens to anyone who makes a bad investment? What happens if we default? C'mon, we're all free marketeers here (ironic though it is that China is a COMMUNIST country). If we default won't the free market just correct itself after awhile? Or is China going to invade us?

 

People had the same concerns about the Saudis in the 80s.