Thread: A note of caution for those with deposits in US Banks

^So you are saying US State debt doesn't matter?

Originally Posted by Bugs

Originally Posted by bkkandrew

US Soverign debt repudiation in late September I reakon.

Of this year?

Two options as far as I can see:

1. Under the cover of military action in Iran, printing presses go into overdrive to inflate the debt away (most of it is Dollar denominated)

2. Straight repudiation

Either one in late September, but certainly before the election (unless McCain suddenly looks a cert to win, as this may delay the inevitable).

^

Fruitloop

My god, how many "the sky is falling" threads is this joker going to start?

Originally Posted by bkkandrew

2. Straight repudiation

Either one in late September, but certainly before the election (unless McCain suddenly looks a cert to win, as this may delay the inevitable).

As a neophyte I just looked up "repudiation" on investopedia:

Repudiation
When one party refuses to honor their terms in a loan contract.
This is often seen when a new government is elected and refuses to settle debts acquired by a previous government.

Link: Repudiation

Who think a new administration can come in do this? Honest question from a neophyte.

Originally Posted by Accidental Ajarn

My god, how many "the sky is falling" threads is this joker going to start?

I quite agree with AA this time, bkka is losing it. Are you sure you are not the same poster ?

I think it is simply a case of not putting all your eggs in one basket.

^^Butterfly, before I turn in detail to Milkman's sensible question, I will address you silly one by noting you have not answered my question in post 276...

^The question, because I know you have a notoriously short attention span, was do you think that US State debt doesn't matter?

Originally Posted by bkkandrew

was do you think that US State debt doesn't matter?

Actually a good question,

yes it does matter for the state, not the Federal government. But if you are going that route, what about Corporate Debt ? Municipal ? County ? why stop at the state ?

And in England, what about Council debt ? hey what about Football club debt as a collective burden on the local fan base ?

so what's your point with state debt ? should it be included as total debt for Federal Government even though they didn't create the debt in the first place ? The state is NOT the Federal government, I do hope you are not confusing local government with Federal government.

^Good, so you accept that State debt is important. Lets go back to the Wiki dispute, which I assume you have now skim-read:

a special formula for the US as opposed to other countries and only count public federal debt which gives off a much lower percentage.

So, the figures you quoted in haste, without reading the background material, actually account for public debt in an entirely different way than the countries you are making comparison with.

Originally Posted by bkkandrew

^Good, so you accept that State debt is important.

Yes it's important for the state, not the Federal government. You need to get familiar yourself with the US system, it's very different from what we are used to as Euros and other nationalities. Also the US banking system is very specific, it's structured in a significant different kind of way than other countries. Since you based all your knowledge on news clips, you wouldn't catch those fundamental differences, but there are there, and they are huge books about it, something I doubt you have read.

Originally Posted by bkkandrew

a special formula for the US as opposed to other countries and only count public federal debt which gives off a much lower percentage.

That's because you are assuming the US Federal system is the same as everyone else. It's not, so those adjustments might be justified. Most countries public debt are "straightforward" because there is one central government with all the power. This is not true in the US. Local governments have so much power that they could actually be regarded as mini-countries by themselves, much like the constituent countries of the EU.

Now, I see that your failed to answer my question about why stopping at the state debt and not add Municipal debt back into the calculation if we follow your line of thinking ? the truth is that the Federal government didn't write those debts, so why should it be accountable ?

Originally Posted by Butterfly

Originally Posted by bkkandrew

was do you think that US State debt doesn't matter?

Actually a good question,

yes it does matter for the state, not the Federal government. But if you are going that route, what about Corporate Debt ? Municipal ? County ? why stop at the state ?

And in England, what about Council debt ? hey what about Football club debt as a collective burden on the local fan base ?

so what's your point with state debt ? should it be included as total debt for Federal Government even though they didn't create the debt in the first place ? The state is NOT the Federal government, I do hope you are not confusing local government with Federal government.

Again, I have to smile, as, in your haste to make a lame joke about football fans, you have not considered the contagen of liability. If you re-read post 269, you will see that a banking liability, turns into a FDIC liability, which then becomes a Treasury liability.

^ non-sense, not everyone will be defaulting on their debt, and usually the accounts are sold to a stronger bank, so you can take the collective assets of all US banks and match that number with the possible debt defaulting on private loans, that number is perfectly reasonable

again, I note you didn't answer my question and failed to address the issues I have raised when I replied to yours

^Sublety too difficult for you?

You posed the question:

the Federal government didn't write those debts, so why should it be accountable ?

I answered giving another scenario from a previous post thus:

If you re-read post 269, you will see that a banking liability, turns into a FDIC liability, which then becomes a Treasury liability.

So the Federal Government didn't write the banking debts, but has become liable.

You do know that, when I refer to the Treasury, this means the Federal Government?

Originally Posted by Butterfly

my question about why stopping at the state debt and not add Municipal debt back into the calculation if we follow your line of thinking ?

that was my original question, that you carefully avoided to answer,

Originally Posted by Butterfly

Most countries public debt are "straightforward" because there is one central government with all the power. This is not true in the US. Local governments have so much power that they could actually be regarded as mini-countries by themselves, much like the constituent countries of the EU.

Another issue I raised that again you carefully avoided, since you love to focus on things that are pointless so you can go in circular mode,

Originally Posted by bkkandrew

I answered giving another scenario from a previous post thus:

That scenario is about a PRIVATE debt, nothing to do with the collective PUBLIC debt. Once again, you refused to answer "relevant" questions and will rather focus on silly pointless details or imaginary scenario so you can distract the discussion from your blatant mistakes, misconceptions, assumptions and complete misunderstanding.

Back to you clown, let's see what kind of circular argument you are going to come up with now

Why is this so hard for you to understand? Your basic assertion was flawed. You simply looked up the Wiki table of Government debt, but didn't bother to note that it was innaccurate.

For example, the US debt figure is Federal Debt ONLY, yet for Canada? I quote:

Public debt includes not only the federal debt but the provincial and territorial debts as well.

Source:

Talk:List of countries by public debt - Wikipedia, the free encyclopedia

So, your comparison table is CIA produced nonsense. Using it as your central argument is indeed a blatant mistake, misconception, an assumption and complete misunderstanding. (To coin a phrase.)

Originally Posted by Butterfly

that was my original question, that you carefully avoided to answer,

Just because you happen not to like an answer, doesn't mean that you have not been answered.

Originally Posted by Butterfly

Most countries public debt are "straightforward" because there is one central government with all the power. This is not true in the US. Local governments have so much power that they could actually be regarded as mini-countries by themselves, much like the constituent countries of the EU.

Canada? - Nope, same structure as US.
Germany? - Nope, same structure as US.

here we go, going into circular mode as expected

first, I didn't look at that wiki where you claimed I got my numbers, it was from a different source, not wiki, so your whole conspiracy theory about me missing the "dispute" from the CIA was completely over the top and typical of your paranoia and silly clown mentality, I didn't even look at the page

Second, you seem to infer that the Federal Government is responsible for all debt, even private, indirectly by extra polling a scenario of the FDIC defaulting ??? I mean WTF, are you really that clueless ? why not go the whole route of USD debt in foreigner countries then ? should the Federal government be also responsible for Eurodollar defaulting ????

Originally Posted by bkkandrew

Your basic assertion was flawed.

you say, but since you do not have the brain to analyze and discuss those kind of matters, I would suggest you stick to copy/paste of news clips.

Btw, still waiting for you to answer the question ? why not include Corporate Debt in your "estimate" ? I mean surely they are "important" as you put it ?

back to you troll,

Originally Posted by Butterfly

here we go, going into circular mode as expected

first, I didn't look at that wiki where you claimed I got my numbers, it was from a different source, not wiki, so your whole conspiracy theory about me missing the "dispute" from the CIA was completely over the top and typical of your paranoia and silly clown mentality, I didn't even look at the page

So where did you get it from then?

Seems a long paragraph to avoid telling us...

Originally Posted by Butterfly

Second, you seem to infer that the Federal Government is responsible for all debt, even private, indirectly by extra polling a scenario of the FDIC defaulting ??? I mean WTF, are you really that clueless ? why not go the whole route of USD debt in foreigner countries then ? should the Federal government be also responsible for Eurodollar defaulting ????

The CIA Handbook that has measured debt to GDP %ages strangely excludes all debt other than Federal for the US figure, yet includes Municipal and State debt for comparable countries, such as Canada.

Quoting like with like would be a start.

Originally Posted by Butterfly

Second, you seem to infer that the Federal Government is responsible for all debt, even private, indirectly by extra polling a scenario of the FDIC defaulting ??? I mean WTF, are you really that clueless ? why not go the whole route of USD debt in foreigner countries then ?

The FDIC, under its charter, would have to replenish its shortfall from the Treasury. After Indymac et al, the current reserve ratio is too low (according to its charter) and, indeed, this would add to the Federal debt.

Originally Posted by Butterfly

Btw, still waiting for you to answer the question ? why not include Corporate Debt in your "estimate" ? I mean surely they are "important" as you put it ?

Corporate debt is not underwritten by the Treasury, except in exeptional circumstances (of which we are about to get a case in point - the Freddie and Fannie show).

Most US corporates simply file for bankruptcy when they become insolvent and unsecured creditors face the loss. So, no, apart from those institutions that have specifically been underwritten by the Treasure, the corporate debt figures have no place in the equation.

Originally Posted by Butterfly

your paranoia

Originally Posted by Butterfly

silly clown mentality

Originally Posted by Butterfly

you do not have the brain to analyze and discuss those kind of matters

Originally Posted by Butterfly

back to you troll,

Butterfly, much as I have enjoyed exposing your lack of knowledge over the past months, would it be possible to post in a slightly less rude manner and stick to the facts?