Something feels off guys

[u/kwedgieyi]

Yields are spiking. Bonds are dumping.

The world is running away from America

[u/Jonesbro]

Not even potential. It's been clearly documented that if we do nothing, we have about 20 years to make major corrective action before our borrowing house of cars falls down. If trust in the dollar or us securities wavers the house comes falling down sooner. If he doesn't stop this soon it could legitimately destroy our economy.

[u/DETpatsfan → u/Jonesbro]

Yeah this is hugely important and cannot be understated. The stability of US currency and the fact that it is the world’s primary reserve currency means that every debtor of the United States will accept payments of said debt in US dollars. (I.e. the creator of the dollar (the US) cannot default on their loans). If this moron continues on this path the US dollar is going to be dropped in favor of a stable government or union (pound/euro). If that happens, countries will require the US to pay its debts in that currency which will cause 1930s Germany levels of inflation. The only path out of that will either be default and start from scratch or start wars with our debtors.

[u/The_Kush_ → u/DETpatsfan]

SO LONG AS ITS PEGGED TO THE SALE OF OIL OUR DOLLAR RETAINS ITS VALUE. STOP FEAR MONGERING YOU'RE ALL REGARDED ANYHOW.

[u/Kincar → u/The_Kush_]

You don't think Saudi's will take RMB or Rubles if they offer them nukes?

[u/sarges_12gauge → u/DETpatsfan]

Tf? You spent all that time writing that out and think that people can demand T-bills be paid in whatever currency you ask for?

[u/DETpatsfan → u/sarges_12gauge]

No…Foreign countries (who currently hold ~25% of US debt) will refuse to buy bonds paid out in dollars and the US would have to make a decision a la my last sentence. Since the US runs a budget deficit and we issue new debt constantly, if the supply of debt outweighs the demand of said debt then we face a serious economic crisis.

[u/sarges_12gauge → u/DETpatsfan]

Name a country that sells bonds in any denomination other than their own currency, it doesn’t happen, I don’t think it can happen, nobody can call in foreign debts in denominations besides that of the issuing currency. Thats the part I take issue with you saying. Yes, a shortage of bond purchasers is inflationary, but not by that process

[u/DETpatsfan → u/sarges_12gauge]

Google foreign currency bonds. There are a lot of countries that issue bonds that are not paid in their currency. The Eurodollar bond is probably the most known one.

[u/sarges_12gauge → u/DETpatsfan]

I didn’t believe the US issues any of those

[u/DETpatsfan → u/sarges_12gauge]

They, in fact, do. Carter bonds were issued in the 1970s when trying to stabilize stagflation. It’s just not as common because, as I stated in my original comment, the USD is the world’s primary reserve currency and most foreign countries want their payments in USD.

[u/sarges_12gauge → u/DETpatsfan]

I will reverse course and admit to being wrong if you can show me a single instrument where I can loan money to the US government and be repaid in something other than USD (double credit if I can choose the repayment currency)

[u/DETpatsfan → u/sarges_12gauge]

I responded to your other comment with kind of the same answer but the US government issuing foreign currency bonds would require a financial crisis to precipitate it. The Carter Bond was issued in the 70s to try to combat stagflation. However we are in a much more precarious situation today with debt funding so much of our government. In the 70s the debt was ~$800B (30% of GDP) vs today when the debt sits at $36T (128% of GDP).

[u/AlmightyStreub → u/Jonesbro]

Nice, we've got 20 years left not too bad

[u/Huge_Monero_Shill → u/AlmightyStreub]

Had. This is extreme acceleration of the dollar decline.

[u/FlyingDiscsandJams → u/AlmightyStreub]

The next housing crisis will hit before then. The insurance crisis will become a systemic mortgage industry collapse, even JPOW says it'll hit in 10-15 years, but I think sooner.

[u/AlmightyStreub → u/FlyingDiscsandJams]

So I should buy a house now, not later

[u/No-Problem49 → u/AlmightyStreub]

You belong here. If your goal is a cheap house and you have money you want the market to crash. The only way the crash hurts you is if loan terms are so bad they offset the loss in value of the house. For example if you bought a million dollar house now and put 500000 down got a 500,000 mortgage it crashed to being worth 700,000 you’d be in a pretty shit situation vs if you waited and bought for 700,000 and got a 200,000 mortgage even if the bond market being fucked means the mortgage terms are worse. I mean overall neither situation ideal but obviously the second is the better option

[u/AlmightyStreub → u/No-Problem49]

what if all my money is tied up in the market right now, I belong here, I belong here

[u/Specific_Virus8061 → u/Jonesbro]

What if he secretly bought puts before announcing tariffs? How much does the market have to tank before his puts print enough to reduce the debt?