shanecurran
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quote:
Originally posted by eastmn
No government has ever repaid it's debt (always defaults).
Ref: Adam Smith - Wealth of Nations
That is a good point to consider in the conversation about debt. Personal debt must be paid back by the individual before they die. Institutional debt never has to be paid back.
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Last edited by shanecurran on Fri Apr 08, 2011 7:51 pm; edited 1 time in total |
Thu Apr 07, 2011 7:16 pm |
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coaster
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quote:
Originally posted by eastmn
No government has ever repaid it's debt (always defaults).
There's defaults, and then there's defaults. The first thing a government is going to try is avoiding an actual default by inflating the currency, so past debt can be continued to be serviced and repaid with cheaper money. The U.S. has done that in the past, and in my opinion, is now doing that again. It just hasn't quite caught the public notice yet, but I'm quite sure it's in the front of Bernanke's mind, and I'm also quite sure he isn't fooling any of the other central banks.
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Fri Apr 08, 2011 5:15 am |
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shanecurran
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quote:
Originally posted by coaster
The first thing a government is going to try is avoiding an actual default by inflating the currency, so past debt can be continued to be serviced and repaid with cheaper money.
You are absolutely right. There was a time in the 70's where inflation was higher than some fixed rate loans that consumers owned. For those lucky individuals the real rate of interest was negative. I absolutely agree that Bernanke has an incentive to increase inflation so that the service on our debt is lower.
It is easy for the fed to justify higher inflation by saying that they were forced to use expansionary measures to bring the economy out of a recession.
The problem with high inflation, one that is also rarely mentioned, is that it increases wealth inequality. Given the current wealth distribution in the United States, any widening of the gap can be destabilizing
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Fri Apr 08, 2011 1:28 pm |
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eastmn
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Makes cheaper money, but it doesn't stimulate the economy? Contrary. The tax man cometh, the govt printing presses are running 24/7, but at what point would such a fiat system collapse? Would it take some sort of revolt, or is it mere vanity (conspiracy, agenda); which is exactly what's at play with these boom/bust cycles ?
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Fri Apr 08, 2011 7:40 pm |
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emmiculture
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Thanks Oldguy for that detailed information.....
I was about the same confusion which i tried searching many a times.
Thanks
Bad credit mortgage lenders
Personal finance budgeting
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Mon Apr 11, 2011 11:24 am |
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KeithSpringer
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| Stocks on fire |
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The market is running to new highs as positive earnings continue to push stocks higher. Although many seem surprised by this, it’s the least we should see after $14Trillion in stimulus. The real test will be if and when the free money stops. Stay tuned.
Keith Springer
http://www.keithspringer.info – Providing relevant and timely market commentary
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Wed Apr 20, 2011 4:53 pm |
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coaster
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There'll be money coming out of the woodwork and out from under mattresses. That'll be the signal to start getting conservative.
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Thu Apr 21, 2011 7:01 am |
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jennypaul
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Mon Apr 25, 2011 6:36 am |
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jeffreymint
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Debts are always a headache. For some reason people just cannot stay away from them. Guilty of it too. Argghh.
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Thu May 05, 2011 2:35 pm |
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cccfree
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Yeah the last thing that a creditor wants to do is charge off debt, it reflects poorly on their balance sheet.
Banks are usually owned by larger financial institution and their bottom line, or profits is the most important, and if they are charging off debt it will show on their balance
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Tue May 10, 2011 10:44 pm |
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cccfree
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don't know too much about the national debt but I know we owe the Chinese a bunch of money.
Debt Settlement Scam | Credit Counselors
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Tue May 10, 2011 10:53 pm |
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