China is the largest holder of US debt.
US markets to crash on tuesday ?
- Thread starter RadoX
- Start date
China is the largest holder of US debt.
Unlikely. They will almost certainly raise the debt ceiling, and in reality they have a few months leeway with regard to reserve.
Devaluing the dollar is un-necessary as it is effectively pegged to oil prices so they could print more and the market would absorb it, it may create a dip in the dollar/oil prices but it will correct pretty quickly.
The issue is really political rather than economic at the moment, although the longer the stalemate persists the more the markets will react and it is the markets, not the rating agencies, that really decide the risk to investors.
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Soldato
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This. Odd times.
Because they would rather teach you Shakespeare and Music rather than something remotely useful. Any great writer has done so of there own back same as any brilliant musician has learnt how to play music elsewhere from school etc.
It has perplexed me since i got thrown out of school for non compliance with there ridiculous ideology's.
- you must learn the recorder or ill punish you by isolating you and make you miss crucial teaching such as Science/Maths/English and you will also miss PE that will in turn negate the ability for you to expend energy therefore making you agitated in lessons.
I have no clue why they don't teach things such as business, how to brand a product, basic economics. I belive they did teach me some pretty wrong/biassed things about politics in humanities. Guess they have gotten even worse than when i was in the absurd English education system.
i agree with this a little (i left school in 1996 i take it things haven't changed) but this is not really what school is for. most people don't care, people who do will keep up to date through the media or higher education.
To be fair PE is a subject detested by many and a joke in most schools.
Rating agency classifications don't really affect institutional investing which is what matters. They've little credibility remaining anyway after being spectacularly wrong and in cahoots with major financial institutions as demonstrated from 2007 onwards.
The government has built up $14 trillion of debt, which is basically the legal ceiling they are allowed to borrow (their credit limit on the credit card). People, banks and other countries can buy this debt with treasuries. They are due to be paid on August 2nd. The problem is they don't have enough money in the budget to pay them. If they raise the debt ceiling it will let them borrow more to pay the debt due on the 2nd. It's like getting another credit card to pay your mortgage payment. But what happens next time it's due?
If they don't raise the ceiling they can easily pay the debt due on August 2nd with tax revenue, but they will have to cut something else immediately. They will not be able to send welfare checks out, they would bounce.
The other option is simply not pay back the treasuries which would downgrade their credit rating and force them to pay more interest because nobody would want to buy these risky bonds now. That's why Greece has to pay 30+% interest on it's bonds.
Left wants to do the first option, right says the want to do something close to the second option (in reality nobody wants to cut anything, except for the tea party).
If the do raise the celing they will have to raise taxes which will cut private sector pay and drop the GDP.
If they don't raise the ceiling they will have to cut public sector pay which will drop the GDP too.
To answer the OP basically the GDP will drop either way.
They're not raising the blood alcohol level to solve drunk driving, they're increase blood level so that alcohol does kill the driver and let it crash into a pack of children.
Like basic English?
Though I do agree that the education system is quite poor, it seems like it's mainly about conformity and being part of "normal" society rather than anything meaningful to people as individuals.
School's crap, the onus is on you (or "us") to educate yourself if you really want to learn.
Soldato
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I will say this: i've learned infinitely more from the Internet than i ever have from the education system.
Like basic English?
Though I do agree that the education system is quite poor, it seems like it's mainly about conformity and being part of "normal" society rather than anything meaningful to people as individuals.
point proven exactly. i know my english is pretty bad but id rather learn about other things than minute gramatical/spelling mistakes
It turns out learning Mandarin is quite difficult. I might just Ray Mears it once WW3 kicks off. Later, suckers
It turns out learning Mandarin is quite difficult. I might just Ray Mears it once WW3 kicks off. Later, suckers
bear grylls it tbh, you get to drink your own **** then.