# Is the USA going to hell in a hand basket?



## Miser (Apr 24, 2011)

*US Debt*

Current: $15.2 Trillion
2004: $7.3 Trillion

Deficit 2011: 1.6 Trillion

Debt added under Obama
According to TreasuryDirect.gov, the United States had a total debt load of $10,628,881,485,510.23 on January 20th, 2009. 

As of January 19th, 2012, the current outstanding public debt load of the United States was:

$15,236,288,061,558.65

This means that the US national debt load has grown 43.3% since President Obama took office in early 2009.

*In 3 yrs??? Anybody see a trend? How about if and when it can end?*

This is not an indictment of Obama, as it is hard to stop an event in motion. I am apolitical, just hate ‘em all!
More an idea of the direction the US is going and possible price move of PM’s.

It’s hard to argue that the massive debt that the US has accumulated is out-of-control and that the United States is currently standing in front of a very dark precipice.


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## madeincanada (Dec 2, 2011)

The massive debt will become a problem; however I do believe the United States will be able to overcome it. Inflation, restructure, and austerity is a probable solution.


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## Miser (Apr 24, 2011)

madeincanada said:


> The massive debt will become a problem; however I do believe the United States will be able to overcome it. Inflation, restructure, and austerity is a probable solution.



I agree with one of your solutions.......sorry times for our southern cousins and unfortunately us.


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## doctrine (Sep 30, 2011)

They don't have a problem, because they're not paying that much interest. They're issuing 30 year bonds at 3%. They could probably double their debt and still be fine.


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## newbie (Dec 12, 2009)

Miser said:


> *US Debt*
> 
> Current: $15.2 Trillion
> 2004: $7.3 Trillion
> ...


i absolutely agree.
but..... there is nowhere else in the world with such mkt depth.
one day the party will be over , and we r all screwed.
in 1929 it was called the great depression.


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## ddkay (Nov 20, 2010)

I'm more worried about ourselves, personally. Signs that the Australian and Canadian housing bubbles are going to pop can be picked up early in Brazil and it is not going be pretty.


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## Miser (Apr 24, 2011)

doctrine said:


> They don't have a problem, because they're not paying that much interest. They're issuing 30 year bonds at 3%. They could probably double their debt and still be fine.


If you doubled your mortgage in 8 years at 3% and........
If you were adding 40+% to your mortgage every 3 yrs at 3% would you have no problem???????????? 
I think you would be a *lot* worried?
Why would the USA be any different?

Only reason they have breathing space is, they are the reserve currency and can print at will.
Sort of like an unlimited credit card.
Eventually the creditor(China, etc.) gets worried and refuses take any more charges. Slowly at first.....and it is happening....and then what?

Print more dough because you can.....only way out.....and then what?
You tell me????


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## newbie (Dec 12, 2009)

ddkay said:


> I'm more worried about ourselves, personally. Signs that the Australian and Canadian housing bubbles are going to pop can be picked up early in Brazil and it is not going be pretty.


just to add to ur comment.
the Keynesian act today reflected the rebound on equities .
good comment in regards to ourselves with the highest level of debt /household in a very long time.
but everything is Rosy.
lets keep smelling the flowers


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## newbie (Dec 12, 2009)

Miser said:


> If you doubled your mortgage in 8 years at 3% and........
> If you were adding 40+% to your mortgage every 3 yrs at 3% would you have no problem????????????
> I think you would be a *lot* worried?
> Why would the USA be any different?
> ...


we should all thank Nixon when he decouple gold from the dollar.
that is why the USA can print money at will.
i wonder if anyone here knows why.
i am sure some do


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## Causalien (Apr 4, 2009)

ddkay said:


> I'm more worried about ourselves, personally. Signs that the Australian and Canadian housing bubbles are going to pop can be picked up early in Brazil and it is not going be pretty.


Australia is managing well. Unlike our central bank who refuses to raise rate. I am not sure Australia will pop, but I am pretty sure Canada will after some of the things I've heard from foot soldiers at the front line. Inquire about housing from your own connections and make a judgement call. I've spent the past 2 years gathering data on how money is flowing in RE and I really don't like what I see. What I know is that the root cause is not having a problem right now, but when it does, it is Canada that's going to take all the loss. Unlike what I previously thought. This is the part I don't like, there's no liabilities for the root cause. 

Cross our fingers the root is not going to have problems in the next 5 years while the 0 down 40 year amortization crowd goes for a renew.


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## Miser (Apr 24, 2011)

1971 was when Americans began the de-coupling of the US dollar to gold. The begining of Fiat money.
Ending Bretton Woods.


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## Miser (Apr 24, 2011)

Causalien said:


> Australia is managing well. Unlike our central bank who refuses to raise rate. I am not sure Australia will pop, but I am pretty sure Canada will after some of the things I've heard from foot soldiers at the front line. Inquire about housing from your own connections and make a judgement call. I've spent the past 2 years gathering data on how money is flowing in RE and I really don't like what I see. What I know is that the root cause is not having a problem right now, but when it does, it is Canada that's going to take all the loss. Unlike what I previously thought. This is the part I don't like, there's no liabilities for the root cause.
> 
> Cross our fingers the root is not going to have problems in the next 5 years while the 0 down 40 year amortization crowd goes for a renew.


I agree....downturn.........in CDN housing.
What do you do if you live in a home and LOVE it???
Biggest asset(I'm in the 2nd most $$$ in the world) and you CAN'T sell it..it's home!

Tough call, eh?


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## newbie (Dec 12, 2009)

Miser said:


> 1971 was when Americans began the de-coupling of the US dollar to gold. The begining of Fiat money.
> Ending Bretton Woods.


u nmust know why Nixon did it .
had he not done it............
where do u think the americans would be.
they still are the largest gold reserve holders followed by i believe Germany last i checked.
oh jeez , i let the secret out lol


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## Miser (Apr 24, 2011)

newbie said:


> u nmust know why Nixon did it .
> had he not done it............
> where do u think the americans would be.
> they still are the largest gold reserve holders followed by i believe Germany last i checked.
> oh jeez , i let the secret out lol


At the time ..a good move.
Following governments abused it.

All the gold holdings in the USA would pay down very little debt.
The total value of all gold ever mined would be about US$9.2 trillion @ 1900 an ounce
They don't even have 20% of that.

Without GDP growth there should be no increase in money supply.
The US money supply has topped GDP by about 3X in the last 5yrs.

Inflating the currency without increase in growth = inflation


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## newbie (Dec 12, 2009)

Miser said:


> At the time ..a good move.
> Following governments abused it.
> 
> All the gold holdings in the USA would pay down very little debt.
> ...


u mean at that time "the perfect " move.
for the following generations yet to come.
i am not implying that the US gold reserves are there to pay debt, they are there for another reason.
that is all.
as for GDP u must know that the US has hit 100% of their debt/GDP ratio.
pretty damn close to , lets say greece?


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## Miser (Apr 24, 2011)

newbie said:


> u mean at that time "the perfect " move.
> for the following generations yet to come.
> i am not implying that the US gold reserves are there to pay debt, they are there for another reason.
> that is all.
> ...


Hence ...the title of my post.

Greece is a basket case.......so is the US....just a matter of time.
Inflating the money supply with no GDP growth, bodes badly for any nation.


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## newbie (Dec 12, 2009)

Miser said:


> Hence ...the title of my post.
> 
> Greece is a basket case.......so is the US....just a matter of time.
> Inflating the money supply with no GDP growth, bodes badly for any nation.


Miser
good talk
gotta go.
i have tomorrows draw to watch on Ng .
watch out for options expiry on gold thursday.
i am sure u know where puts are lined up
GL


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## Eder (Feb 16, 2011)

Any student of the 1929 crash & the following depression would understand why Obama & the Fed did what they did. He should get a medal for avoiding another depression.
At least they seemed to learn from history while most have not.


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## dubmac (Jan 9, 2011)

Check out this chart if you want too see who really cranked up the borrowing in the US 

http://www.snopes.com/politics/politicians/nationaldebt.asp


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## Miser (Apr 24, 2011)

newbie said:


> Miser
> good talk
> gotta go.
> i have tomorrows draw to watch on Ng .
> ...


I know when "puts" are invloved ya gotta be hard! ..straddle... lol
Enjoyed it ..."newbie?"...ya right!
GL


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## Causalien (Apr 4, 2009)

Miser said:


> I agree....downturn.........in CDN housing.
> What do you do if you live in a home and LOVE it???
> Biggest asset(I'm in the 2nd most $$$ in the world) and you CAN'T sell it..it's home!
> 
> Tough call, eh?


I wouldn't know. I hate owing a home simply because of my minimalist lifestyle and the fact that I should not be tied down with all these overhead at this point in my life.

I should be completely and utterly focused on making something great, but instead am bogged down by all these laws and regulations. Oh well, life is unfair. Only the rich get to live in the promised land.

Also, the future is mobile.


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## Causalien (Apr 4, 2009)

Miser said:


> I agree....downturn.........in CDN housing.
> What do you do if you live in a home and LOVE it???
> Biggest asset(I'm in the 2nd most $$$ in the world) and you CAN'T sell it..it's home!
> 
> Tough call, eh?


I wouldn't know. I hate owing a home simply because of my minimalist lifestyle and the fact that I should not be tied down with all these overhead at this point in my life.

I should be completely and utterly focused on making something great, but instead am bogged down by all these laws and regulations, because RE was a big opportunity. Oh well, life is unfair. Only the rich get to live in the promised land.

Also, the future is mobile.


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## Miser (Apr 24, 2011)

Causalien said:


> I wouldn't know. I hate owing a home simply because of my minimalist lifestyle and the fact that I should not be tied down with all these overhead at this point in my life.
> 
> I should be completely and utterly focused on making something great, but instead am bogged down by all these laws and regulations, because RE was a big opportunity. Oh well, life is unfair. Only the rich get to live in the promised land.
> 
> Also, the future is mobile.


I was rambling......I am in a great position and I am aware of it.
Not meaning to be an ***.....just what was on my mind.
Thanxs for your post.
GL


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## Miser (Apr 24, 2011)

dubmac said:


> Check out this chart if you want too see who really cranked up the borrowing in the US
> 
> http://www.snopes.com/politics/politicians/nationaldebt.asp


Love snopes....this where I was...

http://www.davemanuel.com/how-much-...tates-have-when-barack-obama-took-office-137/


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## ddkay (Nov 20, 2010)

China wants to keep their renminbi weak for cheap exports, and they do this by buying USTs. It's the cost of doing business with America for them, and why their manufacturing industry is so successful there. For now there is no alternative. I don't think they are worried about the US. They are worried about their trade balance though. If Americans start saving and buying less from China, China starts to ramp up their treasury holdings and pushes interest rates even lower to bring out the crazy consumers again.

http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt


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## Miser (Apr 24, 2011)

ddkay said:


> China wants to keep their renminbi weak for cheap exports, and they do this by buying USTs. It's the cost of doing business with America for them, and why their manufacturing industry is so successful there. For now there is no alternative. I don't think they are worried about the US. They are worried about their trade balance though. If Americans start saving and buying less from China, China starts to ramp up their treasury holdings and pushes interest rates even lower to bring out the crazy consumers again.
> 
> http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt



With US Debt rising can we agree the tap is slowing.
If you can think trend....what way would you lean.
*How can you buy you own debt?*

For a minute be China...thinking....maybe....a nation dying??
Once again my initial post was ment to be .....any trend here??

http://www.bloomberg.com/news/2012-...for-second-straight-month-as-yields-fell.html


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## Causalien (Apr 4, 2009)

Miser said:


> I was rambling......I am in a great position and I am aware of it.
> Not meaning to be an ***.....just what was on my mind.
> Thanxs for your post.
> GL


Shoot, did I sound offensive again? I wasn't implying that you are an ***. I am just bitter that I wasn't born rich so I could afford a good lawyer and accountant to be my bi**h and do all these paperworks for me. April is creeping closer every day.

People always points to Bill gates and Steve Jobs as the epitome of entrepreneurship. But they always fail to look at how good their family background was that allowed them to do that. Same for Warren Buffet.


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## Argonaut (Dec 7, 2010)

Don't understand this talk of more Bernanke bond buying. It hasn't worked and it won't work again. Better would be to print money to pay off debt, or just give away to the people. If it had to be any printing at all.


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## HaroldCrump (Jun 10, 2009)

Argonaut said:


> Don't understand this talk of more Bernanke bond buying. It hasn't worked and it won't work again. Better would be to print money to pay off debt, or just give away to the people. If it had to be any printing at all.


Argo, it's not about the people. Never was.
Were it so, back in 2008, instead of doing the TARP program as a bailout for the banks, they could simply have taken the money and given it to the distressed home-owners for paying off their mortgages.
The actual outstanding amount for the sub-prime mortgages must be significantly less than the trillions spent in various bailouts, guarantees, credit lines, grafts, etc. given to the financial sector.

IMHO, this whole game is an attempt to solve a deeper, underlying problem that had been brewing for quite some time - anaemic GDP growth and structural unemployment.
Low GDP and structural unemployment was not caused by the sub prime crisis, but quite possibly the other way around.

As you might know, maintaining high employment (or "full employment" as the economists call it) is one of the mandates of the Fed.
The Helicopter is answerable to Congress for this charter.

The bond buying does two things - it reduces borrowing rates, and it makes US production more competitive in world markets vis-a-vis other developed countries.
There are secondary goals as well, such as to discourage savings, to reduce the real burden of debt via inflation, etc.

People are perhaps the last consideration in this game, if at all.


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## KaeJS (Sep 28, 2010)

Is this appropriate?

Raise the Debit Ceiling


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## Cal (Jun 17, 2009)

Yep. Get the Americans working, raise taxes, throw in a little inflation.

Canada...won't have the same effect for the housing downturn, if it comes. Our banks will be ok, more or less, it will be the economy and the related workforce that get shafted.


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## Miser (Apr 24, 2011)

KaeJS said:


> Is this appropriate?
> 
> Raise the Debit Ceiling


I hate rap......kinda liked that one! lol


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## newbie (Dec 12, 2009)

Miser said:


> I know when "puts" are invloved ya gotta be hard! ..straddle... lol
> Enjoyed it ..."newbie?"...ya right!
> GL


hehehehe
did u actully get to see where the large "cluster " of puts was at actually, before expiry?
GLTY


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## andrewf (Mar 1, 2010)

I agree that the housing downturn in Canada will be a 'normal' recession and not a financial crisis.

But there is a lot of risk in Canada's housing market, especially if interest rates have to rise to more normal levels to contain inflation. A rise of 3% in interest rates to normal levels would more than double the interest payments on most variable rate mortgages.


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