lol Biden’s consigliere didn’t see this one coming…
The United States faces serious long-run fiscal challenges. But the decision of a credit rating agency today, as the economy looks stronger than expected, to downgrade the United States is bizarre and inept.
— Lawrence H. Summers (@LHSummers) August 1, 2023
GOP is going to be all over this Biden downgrade… 😂😂😂
Biden Treasury is having to increase the Biden UST issuance by $1T in order to pay the additional $1T Biden interest on the USTs due to the Biden rate increases due to the Biden inflation … 😂😂😂
The US Treasury boosted its estimate for federal borrowing to $1 trillion for the current quarter as it continues to replenish its cash buffer https://t.co/iXXL6ESmcw
— Bloomberg Economics (@economics) July 31, 2023
This is the hyperinflationistas dream scenario they have been predicting for decades… having to issue Treasuries in order to pay the interest on the Treasuries..
This is textbook Art degree moron hyperinflationista 101…. These zombies are probably all foaming at the mouth…
I wouldn’t think this development (the embarrassing credit downgrade) would tend to politically motivate the Biden people towards more rate increases.. perhaps the opposite…
Fitch is based in UK and US probably thinks the US rates are too high compared to the UK hence the downgrade of the US … UK rates would have to be well over 10% to be comparable to current US 5.5% rate… with UK CPI at 8% and US CPI at 3%…
Downgrade came soon after US Fed psycho’s latest rate increase in the face of continued reduction in US CPI…
Fitch probably justified in its decision… if the Art degree Fed psychos keep going like they have been the fiscal interest income will get so large it will most likely destabilize US prices towards rapid increase eventually…
Probably Fitch’s way of telling the US Fed psychos “enough already!”…
7 comments:
Biden has closets full of embarrassments.
The Fitch downgrade is silly, just like the “debt ceiling” farce. The three major ratings agencies (Fitch, Moody’s and S&P) are incredibly corrupt. You remember that during the run-up to the 2008 financial crisis, the criminal banks issued worthless mortgages and bundled them into worthless securities called “collateralized debt obligations” (CDOs). The worthless securities were in turn used to make worthless bets called derivatives (e.g. credit default swaps). It was all a criminal scam that made the insiders richer than ever. After it collapsed, Obama made sure that none of the scammers ever went to jail. Instead, ten million Americans were foreclosed on, and were thrown into the street.
In order for the criminal banks to keep this scam going, they paid the criminal ratings agencies to rate worthless CDOs as top quality. Thus, Fitch, Moody’s and S&P are crooks for hire.
Therefore, when the crooks “downgrade U.S. debt,” they do it to make a political statement. S&P did it ten years ago in order to whine about the “debt ceiling” farce. Now it’s Fitch’s turn. The downgrade is arbitrary, meaningless, and a non-crisis; something for the news media to talk about on a slow news day.
Why the “national debt” is not a crisis
First of all, the U.S. government does not borrow its spending money. The U.S. government creates its spending money out of thin air (about $4 trillion per year). The “national debt” is simply money that various parties deposited into their Federal Reserve savings accounts when they bought Treasury securities. The Fed and all other banks are in debt to their depositors. The total amount of money deposited in Fed savings accounts is the “national debt.” This is separate from the U.S. government’s creation and spending of money.
The Federal Reserve creates money out of thin air (like the U.S. government does) when the Fed pays interest on its deposits (i.e. pays interest on Treasury securities, aka on the “national debt”). If there is a “debt ceiling” standoff in Congress, the corporate media outlets pretend that this is a “crisis,” which is it not. The Federal Reserve and the US government continue to pay their obligations via “extraordinary measures,” meaning they simply continue to create money out of thin air like they always do. Nothing skips a beat. Thus, “debt ceiling” standoffs are never a crisis.
(Continued below)
(Continued from above)
The “national debt” explained
At a regular bank, a certificate of deposit is a bank agreement to pay you a certain amount of interest if you leave a certain amount of your money with the bank for a certain amount of time. At the Federal Reserve, Treasury securities are exactly the same. Treasury securities are certificates of deposit from the Federal Reserve.
Therefore the “national debt” is never a crisis, and it never has to be “paid back” to someone as though it is a regular loan from someone. However a bank (including the Fed) must give you back your deposit if you ask for it. This is why your deposit is a debt for the bank. Your deposit is on loan to the bank.
Since the US government creates its spending dollars out of thin air, and since those dollars are accepted worldwide, all monetary policies and decisions by the U.S. government and the Federal Reserve are 100% political.
The “debt ceiling” charade explained
Because of arbitrary federal laws, the US Treasury must issue Treasury securities equal in value to the federal deficit each year. If no one buys the Treasury securities, then the Federal Reserve “buys” them – i.e. zeroes them out. This is a mere formality. It is an empty shell game that involves nothing physical.
In 1917 the US Congress decided to start playing the “debt ceiling” farce. Congress decides how much money to create out of thin air each year, and then Congress must vote to have the Treasury issue securities equal to the federal deficit. This second vote is unnecessary, and indeed the US Congress did away with it in 1979, and did not resume the farce until 1995. We were spared the “debt ceiling” farce for 16 years. Again, all these decisions are 100% political.
The “debt ceiling” game is a way for each of the two parties to dig in and resist if they want to oppose spending by the party that currently holds a majority in Congress.
Konrad Nobody believes any of that….
@ Matt Franko: If you mean that nobody believes all the "national debt" nonsense, yes I know, but it can be helpful to clarify the reality that everyone pretends is not reality.
Also, among average people, most conservatives do indeed believe all the "national debt crisis" and the "debt ceiling" nonsense.
As for woke liberals, they don't have the intelligence of a head of cabbage, and they don't care about any of this. They are simply focused on attacking straight white males.
Well the Biden people are on their way to giving out an additional $1T of free munnie to people for doing nothing again and think this somehow not stimulative… or is going to lead to a reduction in prices for products…
Feds own Atlanta branch has gdp projected +3.9% latest…
Fitch just trying to signal to them to knock it off before it goes too far and we’re back to rising CPI again..
Should call it Fletch. I'm a Chevy Chase fan.
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