The big punishment will be the immediate replacement of the US dollar as a global trading currency. Likely to be replaced with the Euro
Nope. The Euro is toast. And I live in Germany. They screwed up the central bank's ability to print money, which means the European countries are likely to default and cause the European financial system to implode. At least the USA can inflate and take a currency devaluation hit instead.
Maybe SDRs, but basically not really. Chinese Yuan as the third trading block... Unlikely, their economy is as screwed as the US, but in the other direction. I'm betting on gold, it has the history, no counter party risk.
There's no such thing as a "bank-run on bonds" because bonds aren't liquid until their maturity date.
Yes there is and they are. The bond market is huge, it's much bigger than the stock market. Obviously the liquidity of particular bonds differ, but US treasury bonds are typically highly liquid. We're talking nearly a trillion $ traded per day in the US alone.
I can buy for example Greek bonds at far below the face value. How is that not a "bank run on bonds"? It's people dumping them because the perceived risk of default has changed for the worse. The market value is far below par. Same is happening to Italian bonds just now.
Also, banks can't just "call in their loans" ahead of schedule
Yup. I think you will find they mostly can. Usually some reason is required, but I suggest you look at the small print.
and in the stock markets that can delete existing wealth
You can't delete wealth.
The notion of net worth is complete bollocks: If the amount of money in existence is cut in half, so is the net worth.
=> The stock markets are not real wealth, it doesn't exist. If/when people start exiting the markets, e.g. The boomers retiring enmasse, the notional value drops, because it was never there. Numbers in a computer are not wealth, they are only a claim on wealth.
Well, those claims are simply not going to be honored because the wealth is not there.
But let's be correct about how the economics actually work, and what actually works. That makes it easier to see what doesn't.
Banks follow the Basel rules, it means that they have to have a certain percentage of "Tier 1 capital". That basically means AAA rated sovereign debt. If the bonds they hold are re-rated and no longer qualify as Tier 1 capital it means that the banks will have to pull in hundreds of billions of loans as the proportion they are allowed to lend is reduced.
This is why Greece is a problem for the EU. Particularly French and German banks. The bailouts for Greece are not for the Greek government or people, they are for the French and German banks who are exposed to Greek (no longer sovereign; Greece is no longer a country) debt and would have to pull in loans.
Greece's interest rate is like 28%,
No, their bond yield is 28%, the interest the bond pays is almost certainly much much lower. As the value of a bond decreases, (e.g. â100 bond is now worth â25) the yield it provides as a percentage, increases. It means that Greek bonds are seen as risky, but they'll still be paying 6% interest, or whatever. You simply got them on sale at 75% off. The ECB will end up owning most Greek debt (no matter what the politicos think just now) and it won't be at 28% interest.
Yes it can be doom and gloom, but it's inconceivable that the debt limit doesn't get raised. If by some chance the politicians screw the pooch and don't get it lifted, every last one of them better not be re-elected.
There will be no default. The debts will be paid one way or another the only question is what gets cut from the budget if the limits are not raised. It's just enforced vs voluntary cuts.
Wouldn't worry about it too much. Of much more concern is the yield on new treasury issuance, because that absolutely will cause recession.
This is more than a theoretical issue: people often focus on trying to improve the stock market number, instead of trying to improve the economy as a whole. Trying to raise the stock market by printing more money, by borrowing more money, is counter-productive and causes problems.
You should send a letter to Dr. Bernanke with this information. His Cargo Cult economics appear not to have helped much.
Also on The World Bank, and the Exchange Stabilization Fund.
Which means reading up on a guy called Harry Dexter White. None of these organizations are lily white. They exist to project power and achieve geopolitical aims, which makes the recent Dominique Strauss-Kahn controversy highly suspect.
Anyway, the US government already hit the debt ceiling a month or two back, what they have been doing in the meantime is raiding federal employees pension schemes, to the tune of several hundred billion dollars. Once that is all gone (real soon now), they'll start closing down government departments and selling stuff to pay the bondholders. There will be no default even if the ceiling is not raised.
In the meantime, if you hold government bonds which you know are going to decrease in value, what do you do? You sell them and put the money elsewhere. Where? Stock market. The recent rally in the stock market is the smart money getting out of US government bonds ahead of the next set of auctions, at least till the debt ceiling is sorted. It certainly isn't because the economy is running on all cylinders, heading for another recession is more likely.
The US dollar funnels the world's wealth to the USA and allows the US to effectively tax the rest of the world through inflation.
The 40% of government spending which goes on the military is to keep americans fat and happy. Without the dollar siphoning off the wealth from the rest of the world, American lifestyles would be far more difficult to maintain.
It takes 20 years to get from R&D into product
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Bill Gates On Energy
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Thing is, I've yet to hear a compelling solution to the problem of automation that doesn't just boil down to 1) Anyone w/o jobs dies of starvation or 2) Some form of socialism.
You need to read up on the thinking of Silvio Gesell. The nature of money.
Forget the government, the problem is built into the monetary system itself and the government just spent several trillions of your future earnings on saving the existing system.
Automatic Bayesian tagging of incoming email
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7 Days In Email Hell
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For Evolution I wrote a wrapper round bogofilter. The Evolution attitude to external scripts is dumb by the way.
For Thunderbird, I have the TaQuilla add on, which is a bit better integrated. It tags mail as it comes in. Again, using Bayesian statistics.
Both work and once the tagging effectiveness is in the high 90% accuracy, I add filtering so that I don't have to read most of my mail. The computer does it for me.
Slashdot Mirror
due to
Really? It wouldn't have happened? Bankers created civilisation?
That simple.
You're going to stop being a customer all over the place.
Rival currency being share certificates.
Miners being traders leveraged to their eyeballs.
It's all a big ponzi.
High school stuff.
Debt:
http://en.wikipedia.org/wiki/Exponential_function
52 trillion dollars and counting.
At least we don't have to worry about deflation.
52 Trillion US dollars of debt out there.
Yup you do. 1.6 trillion in stimulus doesn't cover it.
They're basically going to be printing for a decade to stop the deflation. Some BIG numbers coming.
The big punishment will be the immediate replacement of the US dollar as a global trading currency. Likely to be replaced with the Euro
Nope. The Euro is toast. And I live in Germany. They screwed up the central bank's ability to print money, which means the European countries are likely to default and cause the European financial system to implode. At least the USA can inflate and take a currency devaluation hit instead.
Maybe SDRs, but basically not really. Chinese Yuan as the third trading block... Unlikely, their economy is as screwed as the US, but in the other direction. I'm betting on gold, it has the history, no counter party risk.
I know it's a small point that might not matter much to your argument, but using the right terms can help make the argument clearer.
Jesus Christ... If you want to be pedantic you can't have a bank-run against anything but a bank.
There's no such thing as a "bank-run on bonds" because bonds aren't liquid until their maturity date.
Yes there is and they are. The bond market is huge, it's much bigger than the stock market. Obviously the liquidity of particular bonds differ, but US treasury bonds are typically highly liquid. We're talking nearly a trillion $ traded per day in the US alone.
I can buy for example Greek bonds at far below the face value. How is that not a "bank run on bonds"? It's people dumping them because the perceived risk of default has changed for the worse. The market value is far below par. Same is happening to Italian bonds just now.
Also, banks can't just "call in their loans" ahead of schedule
Yup. I think you will find they mostly can. Usually some reason is required, but I suggest you look at the small print.
and in the stock markets that can delete existing wealth
You can't delete wealth.
The notion of net worth is complete bollocks: If the amount of money in existence is cut in half, so is the net worth.
=> The stock markets are not real wealth, it doesn't exist. If/when people start exiting the markets, e.g. The boomers retiring enmasse, the notional value drops, because it was never there. Numbers in a computer are not wealth, they are only a claim on wealth.
Well, those claims are simply not going to be honored because the wealth is not there.
But let's be correct about how the economics actually work, and what actually works. That makes it easier to see what doesn't.
Like The Bernank's Cargo Cult economics?
Banks follow the Basel rules, it means that they have to have a certain percentage of "Tier 1 capital". That basically means AAA rated sovereign debt. If the bonds they hold are re-rated and no longer qualify as Tier 1 capital it means that the banks will have to pull in hundreds of billions of loans as the proportion they are allowed to lend is reduced.
This is why Greece is a problem for the EU. Particularly French and German banks. The bailouts for Greece are not for the Greek government or people, they are for the French and German banks who are exposed to Greek (no longer sovereign; Greece is no longer a country) debt and would have to pull in loans.
Greece's interest rate is like 28%,
No, their bond yield is 28%, the interest the bond pays is almost certainly much much lower. As the value of a bond decreases, (e.g. â100 bond is now worth â25) the yield it provides as a percentage, increases. It means that Greek bonds are seen as risky, but they'll still be paying 6% interest, or whatever. You simply got them on sale at 75% off. The ECB will end up owning most Greek debt (no matter what the politicos think just now) and it won't be at 28% interest.
Yes it can be doom and gloom, but it's inconceivable that the debt limit doesn't get raised. If by some chance the politicians screw the pooch and don't get it lifted, every last one of them better not be re-elected.
There will be no default. The debts will be paid one way or another the only question is what gets cut from the budget if the limits are not raised. It's just enforced vs voluntary cuts.
Wouldn't worry about it too much. Of much more concern is the yield on new treasury issuance, because that absolutely will cause recession.
Same beast behind both parties. Go look at their contributers.
The divisions between the two are simply a divide and conquer strategy. Keep the rubes divided and diverted from the real problems and issues.
Bush vs Obama? Fools arguments, all the presidents since JFK have been puppets.
This is more than a theoretical issue: people often focus on trying to improve the stock market number, instead of trying to improve the economy as a whole. Trying to raise the stock market by printing more money, by borrowing more money, is counter-productive and causes problems.
You should send a letter to Dr. Bernanke with this information. His Cargo Cult economics appear not to have helped much.
Also on The World Bank, and the Exchange Stabilization Fund.
Which means reading up on a guy called Harry Dexter White. None of these organizations are lily white. They exist to project power and achieve geopolitical aims, which makes the recent Dominique Strauss-Kahn controversy highly suspect.
Anyway, the US government already hit the debt ceiling a month or two back, what they have been doing in the meantime is raiding federal employees pension schemes, to the tune of several hundred billion dollars. Once that is all gone (real soon now), they'll start closing down government departments and selling stuff to pay the bondholders. There will be no default even if the ceiling is not raised.
In the meantime, if you hold government bonds which you know are going to decrease in value, what do you do? You sell them and put the money elsewhere. Where? Stock market. The recent rally in the stock market is the smart money getting out of US government bonds ahead of the next set of auctions, at least till the debt ceiling is sorted. It certainly isn't because the economy is running on all cylinders, heading for another recession is more likely.
(Oh, also read up on Fractional Reserve Banking, the source of all these problems in the America and Europe: http://video.google.com/videoplay?docid=-2550156453790090544)
Delegate scalability downwards. Throw hardware at the problem.
importing your energy resources from the other side of the world is not the greatest idea in the world.
The #1 thing to help those people is to get them ENERGY.
Yeah lets plonk some nuclear reactors down in Africa...
No what's needed first are stable political environments.
The US dollar funnels the world's wealth to the USA and allows the US to effectively tax the rest of the world through inflation.
The 40% of government spending which goes on the military is to keep americans fat and happy. Without the dollar siphoning off the wealth from the rest of the world, American lifestyles would be far more difficult to maintain.
That's waaaay too late.
No really.
The common agricultural policy should simply be stopped. Taxes refunded and reduced.
What makes you think they aren't in Windows
I've used it.
You might want to care more and spend some time looking at what your government and banks are doing to your national currency.
Thing is, I've yet to hear a compelling solution to the problem of automation that doesn't just boil down to 1) Anyone w/o jobs dies of starvation or 2) Some form of socialism.
You need to read up on the thinking of Silvio Gesell. The nature of money.
Forget the government, the problem is built into the monetary system itself and the government just spent several trillions of your future earnings on saving the existing system.
For Evolution I wrote a wrapper round bogofilter. The Evolution attitude to external scripts is dumb by the way.
For Thunderbird, I have the TaQuilla add on, which is a bit better integrated. It tags mail as it comes in. Again, using Bayesian statistics.
Both work and once the tagging effectiveness is in the high 90% accuracy, I add filtering so that I don't have to read most of my mail. The computer does it for me.
Nobody was interested in 1997. OIl was $20/barrel.
And my car only got 200 miles per tank, 250 if driven carefully.
They really do lots of research, and should enjoy the results aswell.
Why did they put these benefits in Android and not in Windows?