Steve Posted October 3, 2008 Report Share Posted October 3, 2008 'Ah-nold' wants 7 bil for California. We can expect the other states to do the 'what about us?' question to the feds as well. Most of the states nowadays are vassals to the federal government. They can't operate without some form of federal money or program. Education, law enforcement, infrastructure (roads, transportation), and a host of myriad programs, all depend on federal money. The states are far weaker than they were a hundred years ago. They are spendthrifts of the highest order. Link to comment Share on other sites More sharing options...
rogueyam Posted October 3, 2008 Report Share Posted October 3, 2008 Another scenario is if enough people cash their bonds in and refuse to reinvest in bonds, the country goes down the shitter. There is no such thing as "cashing in" a bond. That was what shygye was asking about and the answer is that the whole concept is a myth. One can sell a bond to another investor but one cannot "cash it in" to the U.S. Treasury. Everything you people are spewing on this thread is irrelevant bullshit intended to distract from the plain fact that I am right on this point and the rest of you are wrong. Deal with it. Link to comment Share on other sites More sharing options...
rogueyam Posted October 3, 2008 Report Share Posted October 3, 2008 Of course shygye is correct. The value of newly issued bonds is established by the prevailing interest rate. If enough traders and/or bondholders decided to dump their bonds the value would plummet and interest rates would have to rise. You post nonsense. New bonds are auctioned to new investors. The interest rate is determined by how those investors rate the creditworthyness of the U.S. Government as compared to that of their available alternatives. Simpleminded people think in terms of absolutes, wiser people make comparisons. The present case is a good example. The recent events might cause investors to have increased uncertainty regarding the ability of the U.S. Treasury to pay back the bonds, but what are the alternatives? Who is issuing paper that is more creditworthy? (Note that the Russian, Asian, and European banks and markets are suffering right now too.) It may be that the next U.S. bond auction will benefit from these conditions as investors go for the gold standard of investment security - the full faith and credit of the Unted States Government. Link to comment Share on other sites More sharing options...
Bangkoktraveler Posted October 3, 2008 Report Share Posted October 3, 2008 Another scenario is if enough people cash their bonds in and refuse to reinvest in bonds' date=' the country goes down the shitter.[/quote'] There is no such thing as "cashing in" a bond. That was what shygye was asking about and the answer is that the whole concept is a myth. One can sell a bond to another investor but one cannot "cash it in" to the U.S. Treasury. Everything you people are spewing on this thread is irrelevant bullshit intended to distract from the plain fact that I am right on this point and the rest of you are wrong. Deal with it. rogie, I presented info from a Federal website that says you can CASH IN bonds. Right now you are spotting your usual crap without any references. Provide references from Federal websites or stand down. Link to comment Share on other sites More sharing options...
Bangkoktraveler Posted October 3, 2008 Report Share Posted October 3, 2008 Of course shygye is correct. The value of newly issued bonds is established by the prevailing interest rate. If enough traders and/or bondholders decided to dump their bonds the value would plummet and interest rates would have to rise. You post nonsense. New bonds are auctioned to new investors. The interest rate is determined by how those investors rate the creditworthyness of the U.S. Government as compared to that of their available alternatives. Simpleminded people think in terms of absolutes' date=' wiser people make comparisons. The present case is a good example. The recent events might cause investors to have increased uncertainty regarding the ability of the U.S. Treasury to pay back the bonds, but what are the alternatives? Who is issuing paper that is more creditworthy? (Note that the Russian, Asian, and European banks and markets are suffering right now too.) It may be that the next U.S. bond auction will benefit from these conditions as investors go for the gold standard of investment security - the full faith and credit of the Unted States Government.[/quote'] I think you will see people stop investing in Treasury bonds. If people had invested in Euros a few years ago, they would have seen a beautiful return. As for investing in the USA, I wouldn't. The government is in deep trouble financially and has been making seriously bad decisions which makes me wonder how much longer will the USA be able to stand on two legs. Link to comment Share on other sites More sharing options...
rogueyam Posted October 3, 2008 Report Share Posted October 3, 2008 rogie, I presented info from a Federal website that says you can CASH IN bonds. Right now you are spotting your usual crap without any references. Provide references from Federal websites or stand down. You are an idiot: 10/03/08 06:48 PM - Post#726016 In response to Bangkoktraveler - When will the US financial baillout occur? From your link: "We send your request to the Federal Reserve Bank of Chicago, which offers your security to different brokers, selling it to the highest bidder." This is the bondholder X selling to new purchaser Y stuff I was talking about. This is not the U.S. Treasury redeeming the bond early. Link to comment Share on other sites More sharing options...
Hugh_Hoy Posted October 3, 2008 Report Share Posted October 3, 2008 T Bills might very well be the best place to put your cash right now. Unless you want to put it under your mattress and hope your house doesn't burn down. I "lucked out". I cashed out of my stocks about 4 weeks ago on a gut feeling. HH Link to comment Share on other sites More sharing options...
chuckwoww Posted October 3, 2008 Report Share Posted October 3, 2008 You post nonsense. New bonds are auctioned to new investors. The interest rate is determined by how those investors rate the creditworthyness of the U.S. Government as compared to that of their available alternatives. Simpleminded people think in terms of absolutes, wiser people make comparisons. The present case is a good example. The recent events might cause investors to have increased uncertainty regarding the ability of the U.S. Treasury to pay back the bonds, but what are the alternatives? Who is issuing paper that is more creditworthy? (Note that the Russian, Asian, and European banks and markets are suffering right now too.) It may be that the next U.S. bond auction will benefit from these conditions as investors go for the gold standard of investment security - the full faith and credit of the Unted States Government. Seems like you agree with me then. It is interest rates which determine the value of bonds. US Bonds have always proved to be a safe investment. We are talking about what happens if major investors decide otherwise. But a bond sell-off is impossible according to you. I'm sure the markets will find that very reassuring. Link to comment Share on other sites More sharing options...
Steve Posted October 3, 2008 Report Share Posted October 3, 2008 Also T Bond prices work inversely. When the price drops the interest rates have to go up to compensate for the loss. If Bond prices fall, the government has to offer a higher interest rate to encourage central banks, etc. to buy them. U.S.A. Inc. has seen much better days. Link to comment Share on other sites More sharing options...
chuckwoww Posted October 3, 2008 Report Share Posted October 3, 2008 Better hope the Saudis and the Chinese keep buying those T-Bills CS. No need to thank them....it's pure self interest. Link to comment Share on other sites More sharing options...
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