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US default......or not......

Windwaver

By Windwaver,
in Lite & EZ

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Windwaver

Windwaver

Turbocharged

Given the numbers, the market is anticipating US not to default.

 

If US defaults, China is going to be really mad......and Singapore is not too far off either because of owning so much US Treasury Securities [sweatdrop]

 

Pretty exciting huh [laugh]

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Darryn

Darryn

Turbocharged

Apparently, because of some technical issue with convening the senate they are already in "technical default" (whatever that means)

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Wt_know

Wt_know

Supersonic
(edited)

technical default ... the most profound word of the century

 

just like greece ... is greece actually default? before that ... all cry papa cry mama ... if greece default the whole europe will collapse

i think greece default 2-3 times liao ... horse continue to race and music continue to rocks !

Edited by Wt_know
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Shull

Shull

Turbocharged

technical default ... the most profound word of the century

 

just like greece ... is greece actually default? before that ... all cry papa cry mama ... if greece default the whole europe will collapse

i think greece default 2-3 times liao ... horse continue to race and music continue to rocks !

 

Greece economy don't affect the whole world like USA's economy does leh..

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Wt_know

Wt_know

Supersonic

nice video [thumbsup]


what i meant was ... the whole europe were sh.itting their pants ... don't know what to do if greece default

saying the euro currency will collapse .... don't know how to unwind ... bank will collapse .... like apocalypse

but then greece default come and go ... cyprus default come and go ... i think spain and italy also technical default liao

euro currency still stay ... the europe still TCSS everyday

 

 

Greece economy don't affect the whole world like USA's economy does leh..

 

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Manmaster

Manmaster

2nd Gear

The US is just kicking the can down the road further a bit. The truth is US can't keep raising the debt limit without any repercussion. The day of reckoning will come when investors have lost their confidence in US to pay up. The next question will be at what level will that make people lose confidence. 18T? 20T? or more? History has taught us that no country will remain at the top forever. Not UK, not Germany and definitely not US.

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Ghgan

Ghgan

5th Gear

Here is another line of thought from HWZ

 

I guess your economics teacher never tell you that IOU is also just a piece paper (a paper claim) and when it becomes zero value, there is no wealth destroyed and not everything is lost when you and I are taken together. The factories, roads, and everything are still around and they are the real wealth. Only the paper balance sheets of the parties concerned are affected and they merely have to make adjustments to their production and consumption patterns.

An IOU is an asset on your balance sheet while it is a liability on my balance sheet. It is eliminated (disappear totally) if we do a consolidated balance sheet of you and I. So whatever value the IOU is in the balance sheet, it has no bearing on the consolidated balance sheet because it is just a paper claim between the 2 consolidated parties.

If you cannot understand the concept of "consolidated", I use a simple analogy.

Your wife overspends and issues an IOU to you every month as you lend her money for her expenditures.

After many years, she owes you $100,000 in IOUs and so your wife has a debt of $100K while you have a "reserves" of $100K in IOUs from your wife.

However, what is the wealth reserve of your household (wife + you)?

As a household, you have actually zero reserves and the $100K IOUs are just pieces of paper. If the IOUs become zero value, there is no wealth destroyed and your wife and you as a whole do not suddenly become bankrupt. Your house, car, jobs, kids are all intact. You can choose not to ask your wife to repay but continue to lend her more money and continue to live like in the past, or both of you adjust your lifestyle so that your wife spends less while you spend more.

Of course, you can also choose to divorce your wife but there are severe negative consequences.

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Wt_know

Wt_know

Supersonic
(edited)

no default ... huat ah !!! ... horse continue to race this weekend ...

usa politicians are the best actor and actress ... simi Oscar also no fight ... drama to the best

 

 

Senate approves bill to end shutdown, avert possible default

http://edition.cnn.com/2013/10/16/politics/shutdown-showdown/index.html?hpt=hp_t1

Edited by Wt_know
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Vega

Vega

Turbocharged

I think USA is the only country that can live on by using one credit card to pay another card without the fear of not able to pay up.

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