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CaptainTrouble on scored.co
28 days ago0 points(+0/-0)1 child
Why would there be a currency crisis? People get paid their income in USD, prices are fairly stable and people pay their taxes in USD. The currency is fine, what's the problem?
28 days ago3 points(+0/-0/+3Score on mirror)1 child
You have to sell bonds to print more fiat.
Right now the world is buying less treasuries and more gold instead. Therefore the bond rate goes up.
If the bond rate goes up, then they USA government has to pay a higher rate on the interest it pays on the debt.
The USA government is already paying almost $1.5 trillion per year on debt. If the bond rate goes up in addition to the principal, then the debt balloons.
The USA Government has a lot of SHORT TERM debt it took out since covid that it needs to frequently keep rolling over through treasury bond market. If rates explode then that's like the mortgage RATE going up on your house in ADDITION to the principal amount owed (say you took out HELOC) and now you are fucked with ever increasing mortgage payments and your income doesn't keep up.
28 days ago1 point(+0/-0/+1Score on mirror)1 child
This sounds more like a debt crisis not a "currency" crisis. It's definitely a pressing concern for the US Government though.
There's a lot of options for the government though to ensure this problem never becomes too large:
- Simple lowering spending or raising taxes to reduce the need for debt would lower interest rates by reducing the government's demand for lending.
- Reducing capital gains and dividend taxes would reduce interest rates. So too would a foreign capital outlay levy (raise taxes and lower interest rates).
One way or another at some point in the future we're going to have to take a serious look at spending. The government is just kicking the can down the road but when the "debt crisis" happens, that'll be the time when we do. There's tons of deadweight that can be cut if needed so I doubt any true crisis will ever occur.
Thank you for making the distinction. They do seem to go hand in hand. A debt crisis should become a currency crisis. But today people are under so many devil magick spells that maybe they believe the illusion of the fiat jew dollar as long as they live.
Government raising taxes or reducing Debt = Hahhaha good luck with that. When Ron Paul becomes president?
I'm not sure i quite follow how reducing capital gains and dividend taxes effects the debt load of the USA government or the bond rates.
The easiest thing for the government to do, and pretty much their only option, is hyper inflate their way out of debt like they did during the 1970s after disconnecting from gold standard entirely. That means 10% inflation per year for a decade even if the government lies to you and manipulates the CPI for appearance (putting lots of makeup on an ugly woman).
Right now the world is buying less treasuries and more gold instead. Therefore the bond rate goes up.
If the bond rate goes up, then they USA government has to pay a higher rate on the interest it pays on the debt.
The USA government is already paying almost $1.5 trillion per year on debt. If the bond rate goes up in addition to the principal, then the debt balloons.
The USA Government has a lot of SHORT TERM debt it took out since covid that it needs to frequently keep rolling over through treasury bond market. If rates explode then that's like the mortgage RATE going up on your house in ADDITION to the principal amount owed (say you took out HELOC) and now you are fucked with ever increasing mortgage payments and your income doesn't keep up.
There's a lot of options for the government though to ensure this problem never becomes too large:
- Simple lowering spending or raising taxes to reduce the need for debt would lower interest rates by reducing the government's demand for lending.
- Reducing capital gains and dividend taxes would reduce interest rates. So too would a foreign capital outlay levy (raise taxes and lower interest rates).
One way or another at some point in the future we're going to have to take a serious look at spending. The government is just kicking the can down the road but when the "debt crisis" happens, that'll be the time when we do. There's tons of deadweight that can be cut if needed so I doubt any true crisis will ever occur.
Government raising taxes or reducing Debt = Hahhaha good luck with that. When Ron Paul becomes president?
I'm not sure i quite follow how reducing capital gains and dividend taxes effects the debt load of the USA government or the bond rates.
The easiest thing for the government to do, and pretty much their only option, is hyper inflate their way out of debt like they did during the 1970s after disconnecting from gold standard entirely. That means 10% inflation per year for a decade even if the government lies to you and manipulates the CPI for appearance (putting lots of makeup on an ugly woman).