eCONOMIC THEORY

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NoDrama

Well-Known Member
Harrekin said:
I never said China owned America you tard, learn who you're debating, I said they owned alot more than the official figure states.

If they've been buying over 35% of the bonds at each auction that means they're buying possibly up to 42% more (if they bought say 50% of each auction in total) than they've stated.

China however could own America if it started dumping treasuries around the Fiscal Cliff or other critical economic times
by driving up interest rates.

Seems like I'm talking to myself surrounding how bond auctions work here, having to explain it constantly.
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How can they buy more than 30% if the fed is buying 80% of the issue? 100-80 =20. 20<35. Looks like the most they could buy was 20%, and that is if NO ONE ELSE BUYS ANYTHING.

If China sells the Treasuries it doesn't drive up the interest rates, it devalues the dollar. Interest rates could go to 500% and no one would buy because 500% of nothing is nothing.

You will know China means business when it starts using other currencies to use for trade other than the Dollar, circumventing the reserve currency.

When interest rates go up, it makes the treasuries you own now worth less and less.
 
Harrekin

Harrekin

Well-Known Member
NoDrama said:
How can they buy more than 30% if the fed is buying 80% of the issue? 100-80 =20. 20<35. Looks like the most they could buy was 20%, and that is if NO ONE ELSE BUYS ANYTHING.

If China sells the Treasuries it doesn't drive up the interest rates, it devalues the dollar. Interest rates could go to 500% and no one would buy because 500% of nothing is nothing.

You will know China means business when it starts using other currencies to use for trade other than the Dollar, circumventing the reserve currency.

When interest rates go up, it makes the treasuries you own now worth less and less.
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Dumping treasuries drives up the yield interest rate on new Treasuries issued, it's that Free Market principle you love so much.
 
N

NoDrama

Well-Known Member
Harrekin said:
Dumping treasuries drives up the yield interest rate on new Treasuries issued, it's that Free Market principle you love so much.
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In theory you are correct, but in reality you are all wrong.

If all US treasuries get dumped by China, everyone in the entire world will also dump their US Treasuries and the dollar will buy you nothing and $1 trillion will also be able to buy you NOTHING.
Then the US can put a 1 quadrillion % interest rate on the 1 month bond and no one will buy it, because the return after 1 month would be ZERO. A 100 google percent interest rate on the 30 year would net you a cool ZERO dollars after 30 years. The value of nothing multiplied by as much as you like is still nothing.

Now, if some treasuries get sold, but none get bought by anyone, then they MIGHT raise interest rates, but it really doesn't matter if no one buys any, because the Fed is the buyer of last resort and can always buy enough treasuries to keep interest rates at near zero. ALWAYS, the Fed has Infinity+1 dollars on hand to do this.
 
C

Carthoris

Well-Known Member
carthoris said:
I like correcting people who say we owe China such and such trillion dollars. It is always funny. The same people usually have never heard of the Federal Reserve.
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harrekin said:
China bought so much of your debt that they arnt allowed buy anymore (bout 3 1/2 trillion), and have bought up to 1 trillion via third parties.

So yes, China is the biggest non-American holder of US Treasuries.

Dont like it? Buy them back yourself.
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Harrekin said:
I never said China owned America you tard, learn who you're debating, I said they owned alot more than the official figure states.

If they've been buying over 35% of the bonds at each auction that means they're buying possibly up to 42% more (if they bought say 50% of each auction in total) than they've stated.

China however could own America if it started dumping treasuries around the Fiscal Cliff or other critical economic times
by driving up interest rates.

Seems like I'm talking to myself surrounding how bond auctions work here, having to explain it constantly.
Click to expand...
You obviously have a hard time with reading. My statement was essentially "China doesn't own us, but everyone thinks they do." Your response was 100% incorrect except for them being the largest foreign debt holder. Your response had little to nothing to do with my actual statement. Then you went on to state more things that are incorrect and have nothing to do with the statement. I also suggest that you know little to nothing about the economic state in China. If they screwed us like this, their economy would flat line immediately. Ours would be a recession, but we would get over it. They would have open rebellion and lose control. Once again. China owns less than 10% of our debt, and you obviously don't understand it.
 
C

Carthoris

Well-Known Member
NoDrama said:
In theory you are correct, but in reality you are all wrong.

If all US treasuries get dumped by China, everyone in the entire world will also dump their US Treasuries and the dollar will buy you nothing and $1 trillion will also be able to buy you NOTHING.
Then the US can put a 1 quadrillion % interest rate on the 1 month bond and no one will buy it, because the return after 1 month would be ZERO. A 100 google percent interest rate on the 30 year would net you a cool ZERO dollars after 30 years. The value of nothing multiplied by as much as you like is still nothing.

Now, if some treasuries get sold, but none get bought by anyone, then they MIGHT raise interest rates, but it really doesn't matter if no one buys any, because the Fed is the buyer of last resort and can always buy enough treasuries to keep interest rates at near zero. ALWAYS, the Fed has Infinity+1 dollars on hand to do this.
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At least we wouldn't be in debt anymore:P We could give out ears of corn to pay out trillions in debt. It would definitely make paying off existing loans on houses and cars easier if people saved durable goods because they expected this to happen.
 
N

NoDrama

Well-Known Member
Carthoris said:
At least we wouldn't be in debt anymore:P We could give out ears of corn to pay out trillions in debt. It would definitely make paying off existing loans on houses and cars easier if people saved durable goods because they expected this to happen.
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Well yeah that's the whole idea of inflating the money supply. Makes it super easy for government to pay off their debt, they could care less if you can't afford to eat.
 
Harrekin

Harrekin

Well-Known Member
abandonconflict

abandonconflict

Well-Known Member
Harrekin said:
Welfare = Taxes collected - Administration costs.

Therefore Welfare < Taxes.

Therefore Welfare is a net NEGATIVE on the economy.

I support welfare/disability for people who have worked but cannot currently, but to say it repays itself is ridiculous.
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Well, I certainly don't have a problem with cutting administration costs, let's start with congress members' paychecks. However, since it creates jobs, it has a ripple effect on revenue that I doubt has been fully calculated.
 
C

Carthoris

Well-Known Member
abandonconflict said:
http://www.salon.com/2012/12/12/7_absurd_ways_the_military_wastes_taxpayer_dollars/

ZOMG social welfare feeds poor people and creates jobs while paying for itself in tax revenue!
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I don't think you will get an argument from anyone that the military is a bloated pile of shit with crowned people on top. You might of defended your insane statement instead of attacking a strawman. Did anyone argue for military? If we are going on strict financial benefit then you could argue that the military is about as efficient a use of tax dollars as welfare. That money does create jobs, keep America on top of the world, and support new technologies.

The issue you seem to miss is that benefit isn't the point. The point is right and wrong. It is wrong to take money from people and give it to another. We have a word for it and that word is 'stealing'. I can't justify robbing a bank by giving the money to a charity.

You obviously took the same course as UncleBuck.


 
abandonconflict

abandonconflict

Well-Known Member
Carthoris said:
The point is right and wrong. It is wrong to take money from people and give it to another. We have a word for it and that word is 'stealing'.
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Apparently you don't consider it to be stealing when the rich do it.

The real wealth redistribution that has been going on is the rich getting richer and the poor getting poorer and the middle class disappearing.
 
C

Carthoris

Well-Known Member
abandonconflict said:
Apparently you don't consider it to be stealing when the rich do it.

The real wealth redistribution that has been going on is the rich getting richer and the poor getting poorer and the middle class disappearing.
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I consider it stealing when everyone does it. Rich, poor, middle class, yo momma. It is all the same to me. People getting rich isn't stealing if people give them their money willingly. Middle class is a made up term that really doesn't mean anything. Every person in the United States who doesn't live under a bridge lives better than a majority of the world and better than the people who came before them. Technology and cheap energy is what raises the standards of living.

Far out in the uncharted backwaters of the unfashionable end of the Western spiral arm of the galaxy lies a small unregarded yellow sun. Orbiting this, at a distance of roughly ninety million miles is an utterly insignificant little blue-green planet, whose ape descended life forms are so amazingly primitive that they still think digital watches are a pretty neat idea. This planet has, or had, a problem, which was this. Most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movements of small, green pieces of paper, which is odd, because on the whole, it wasn't the small, green pieces of paper which were unhappy. And so the problem remained, and lots of the people were mean, and most of them were miserable, even the ones with digital watches. Many were increasingly of the opinion that they'd all made a big mistake coming down from the trees in the first place, and some said that even the trees had been a bad move, and that no-one should ever have left the oceans.
 
abandonconflict

abandonconflict

Well-Known Member
Carthoris said:
I consider it stealing when everyone does it. Rich, poor, middle class, yo momma. It is all the same to me. People getting rich isn't stealing if people give them their money willingly. Middle class is a made up term that really doesn't mean anything. Every person in the United States who doesn't live under a bridge lives better than a majority of the world and better than the people who came before them. Technology and cheap energy is what raises the standards of living.

Far out in the uncharted backwaters of the unfashionable end of the Western spiral arm of the galaxy lies a small unregarded yellow sun. Orbiting this, at a distance of roughly ninety million miles is an utterly insignificant little blue-green planet, whose ape descended life forms are so amazingly primitive that they still think digital watches are a pretty neat idea. This planet has, or had, a problem, which was this. Most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movements of small, green pieces of paper, which is odd, because on the whole, it wasn't the small, green pieces of paper which were unhappy. And so the problem remained, and lots of the people were mean, and most of them were miserable, even the ones with digital watches. Many were increasingly of the opinion that they'd all made a big mistake coming down from the trees in the first place, and some said that even the trees had been a bad move, and that no-one should ever have left the oceans.
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"The Congress Shall Have the Power to lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the common defense and general Welfare of the United States." Article I, section 8 of the U. S. Constitution

 
tomahawk2406

tomahawk2406

Well-Known Member
Carthoris said:
I consider it stealing when everyone does it. Rich, poor, middle class, yo momma. It is all the same to me. People getting rich isn't stealing if people give them their money willingly. Middle class is a made up term that really doesn't mean anything. Every person in the United States who doesn't live under a bridge lives better than a majority of the world and better than the people who came before them. Technology and cheap energy is what raises the standards of living.

Far out in the uncharted backwaters of the unfashionable end of the Western spiral arm of the galaxy lies a small unregarded yellow sun. Orbiting this, at a distance of roughly ninety million miles is an utterly insignificant little blue-green planet, whose ape descended life forms are so amazingly primitive that they still think digital watches are a pretty neat idea. This planet has, or had, a problem, which was this. Most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movements of small, green pieces of paper, which is odd, because on the whole, it wasn't the small, green pieces of paper which were unhappy. And so the problem remained, and lots of the people were mean, and most of them were miserable, even the ones with digital watches. Many were increasingly of the opinion that they'd all made a big mistake coming down from the trees in the first place, and some said that even the trees had been a bad move, and that no-one should ever have left the oceans.
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lol............wtf
 
Harrekin

Harrekin

Well-Known Member
abandonconflict said:
Well, I certainly don't have a problem with cutting administration costs, let's start with congress members' paychecks. However, since it creates jobs, it has a ripple effect on revenue that I doubt has been fully calculated.
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That's retarded, forced redistribution actually reduces the spending power of the upper lower and lower middle class, thus creating a net negative on the economy.

Also to pay people in the public sector you must remove spending power from the private sector.

In short...its a scam. As I said, social insurance for taxpayers is truly a positive thing, but lifetime dole jockeys are a drain on the resources to help those very people who need it (unintentionally creating a much lower "welfare class" too) and on the economy of the country as a whole.
 
C

Carthoris

Well-Known Member
abandonconflict said:
"The Congress Shall Have the Power to lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the common defense and general Welfare of the United States." Article I, section 8 of the U. S. Constitution

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And when it doesn't, it has the power to change its own powers to give itself more power. What does this have to do with right and wrong? They could make a law outlawing toothpicks, doesn't make it right. Or do you think marijuana being outlawed is the right thing to do? Just cause government can do it doesn't make it right.
 
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