MeidasTouch Chief Economist Justin Wolfers breaks down the Treasury’s unusual bond market move and what it could mean for interest rates, debt, and your wallet
So piggy F's every thing up and most likely croaks then who's left to clean up his criminal mess. It had better not be regular US. We must win and when we do OVERTURN CITIZEN'S UNITED AND THEM MAKE SURE THOSE FOLKS WHO'VE BEEN SKATING ON PAYING TAXES PAY THEIR FAIR SHARE. Those billionaire's who now keep piggy afloat and still use EVERYTHING we're paying taxes for NEED TO PAY THE PIPER.
I am right there beside you on this Madannie. Citizens United has to go and the bill for the the billionaires needs to be paid like us regular folks have been paying. Then we also need to clean up the unsupreme court that has been raking in the money and goodies from the billionaires.
I'm no trained economist, but as I understand this situation it is not unlike what ordinary Americans are wrestling with in their personal lives. They are seeing the balance on their credit card increasing and it is understandably a big concern. So some of them are trying to pay down credit card debt with HELOC loans or other loans with long maturities. A HELOC takes a chunk of home equity to pay down the credit cards. That can't go on for very long before the family is in more serious financial trouble.
It's not just higher credit card interest but eventually (TYE 2026?) higher personal federal income TAXES (unless you're a million/billionaire?). Only Congress can approve higher US debt fed by higher income taxes. Where is Congress on this latest debt scheme?
Keynesian Economists Now Getting Real With American People
Wolfers is echoing the red flag that Paul Krugman has said today, "don't panic". When Keynesian economists say don’t panic, that means we should panic. Keynesians believe that excessive money printing aka QE is A-OK are now concerned that central bank policy is leading the country into a debt trap. That's defined as when a country cannot afford its debt now at $40T. To service that debt is more than the revenues taken in through taxes.
The country has been on this course for sometime and is the reason that gold and silver are in increasing new highs. It's not that gold and silver are increased in price, it's that the purchasing power of the currency is going down. That's called inflation.
The Keynesian economists like Keynes himself have denigrated a gold standard and have called it a "dangerous relic" to borrow Keynes' words. But gold is money, not a currency which is just a form of credit, not real money.
This debt trap has been accelerated by Cheeto's illegal war, the loss of strategic oil reserves, and most importantly the loss of foreign investors buying our bonds unless they are adequately compensated for taking on the risk of default as measured by increasing bond yields. The danger point is a 5% 10y bond yield.
Or...(and I know this sounds crazy) we could simply tax the wealthiest people and corporations, balance our budget, then start paying down the debt with any surplus.
"IMPOSSIBLE!" you might say.
Well, Clinton did it...and WITHOUT "geniuses" like fElon Musk gutting our government and making us less healthy and destroying our institutions.
Budgets indicate priorities and values: once Americans take our government back from Republicans, we can prioritize the things that help THE MOST Americans and the things we value like food inspection, guardians of our nuclear stockpile, watchdogs and crime solvers, HEALTHCARE for all Americans...all the things Republicans hate and worked to destroy the past 2 years.
VOTE IN NOVEMBER! We can't do ANYTHING until we excise the cancer that is the Republican cult destroying our economy, trade, alliances, union, justice, peace, defense, wellbeing, and peaceful transfer of power (in other words, violating the ENTIRE FKING PREAMBLE AND MOST OF THE REST OF THE CONSTITUTION!)
So piggy F's every thing up and most likely croaks then who's left to clean up his criminal mess. It had better not be regular US. We must win and when we do OVERTURN CITIZEN'S UNITED AND THEM MAKE SURE THOSE FOLKS WHO'VE BEEN SKATING ON PAYING TAXES PAY THEIR FAIR SHARE. Those billionaire's who now keep piggy afloat and still use EVERYTHING we're paying taxes for NEED TO PAY THE PIPER.
I am right there beside you on this Madannie. Citizens United has to go and the bill for the the billionaires needs to be paid like us regular folks have been paying. Then we also need to clean up the unsupreme court that has been raking in the money and goodies from the billionaires.
those scotus 6 are traitors and must be held accountable TOO
Absolutely agree. All 6 are corrupted
If he can bankrupt a ca$ino he can take down the U$. Strike that: is taking down …
I'm no trained economist, but as I understand this situation it is not unlike what ordinary Americans are wrestling with in their personal lives. They are seeing the balance on their credit card increasing and it is understandably a big concern. So some of them are trying to pay down credit card debt with HELOC loans or other loans with long maturities. A HELOC takes a chunk of home equity to pay down the credit cards. That can't go on for very long before the family is in more serious financial trouble.
It's not just higher credit card interest but eventually (TYE 2026?) higher personal federal income TAXES (unless you're a million/billionaire?). Only Congress can approve higher US debt fed by higher income taxes. Where is Congress on this latest debt scheme?
The trick is borrow/loan with your family; IRS requires filing.
Keynesian Economists Now Getting Real With American People
Wolfers is echoing the red flag that Paul Krugman has said today, "don't panic". When Keynesian economists say don’t panic, that means we should panic. Keynesians believe that excessive money printing aka QE is A-OK are now concerned that central bank policy is leading the country into a debt trap. That's defined as when a country cannot afford its debt now at $40T. To service that debt is more than the revenues taken in through taxes.
The country has been on this course for sometime and is the reason that gold and silver are in increasing new highs. It's not that gold and silver are increased in price, it's that the purchasing power of the currency is going down. That's called inflation.
The Keynesian economists like Keynes himself have denigrated a gold standard and have called it a "dangerous relic" to borrow Keynes' words. But gold is money, not a currency which is just a form of credit, not real money.
This debt trap has been accelerated by Cheeto's illegal war, the loss of strategic oil reserves, and most importantly the loss of foreign investors buying our bonds unless they are adequately compensated for taking on the risk of default as measured by increasing bond yields. The danger point is a 5% 10y bond yield.
I always ask, why not arbitrage? Borrow in say, Switzeralnd at 1% to buy our debt?
Because it forestalls the inevitable. Wait for it, the Fed will begin QE but that will just lead to a deeper trap.
Not meaning to sound snarky, as I'm really trying to learn.....isn't what was done today forestalling the inevitable?
Not true. The house usally wins. The lender is the house.
Or...(and I know this sounds crazy) we could simply tax the wealthiest people and corporations, balance our budget, then start paying down the debt with any surplus.
"IMPOSSIBLE!" you might say.
Well, Clinton did it...and WITHOUT "geniuses" like fElon Musk gutting our government and making us less healthy and destroying our institutions.
Budgets indicate priorities and values: once Americans take our government back from Republicans, we can prioritize the things that help THE MOST Americans and the things we value like food inspection, guardians of our nuclear stockpile, watchdogs and crime solvers, HEALTHCARE for all Americans...all the things Republicans hate and worked to destroy the past 2 years.
VOTE IN NOVEMBER! We can't do ANYTHING until we excise the cancer that is the Republican cult destroying our economy, trade, alliances, union, justice, peace, defense, wellbeing, and peaceful transfer of power (in other words, violating the ENTIRE FKING PREAMBLE AND MOST OF THE REST OF THE CONSTITUTION!)
And the deal ends on day after midterms. Hmmm
Very satisfied with the wrap-around expertise provided by Meidas and its affiliates. Thank you. Worth the price of admission.
This was great. Thank you both.
Thanks guys — great report! America is lucky to have you!
Why don’t you talk about Gary Indiana and how those people are suffering?
Thank you so much. Economics was not my best subject.