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For those of you that don't understand why we are fucked beyond comprehension.

 
Dan
User ID: 1438567
United States
06/29/2011 04:40 AM
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For those of you that don't understand why we are fucked beyond comprehension.
I don't understand - what happens when you pay back the debt. What happens if you default?
 Quoting:


When you pay it back your economy collapses because money is created by debt. When you pay off the debt the money disappears except for the interest. The interest is held as profit by banks.

Debt is a good thing when it is controlled because all money in a fiat economy is created by debt. No debt=No Money.

But when the issuance of debt gets out of control it ends in a spiral of debt. ALWAYS. There is a point of no return.

If Bush and friends hadn't created 6 Trillion dollars in debt during his term we wouldn't have crossed the point of no return. That point was crossed in early 2008 when the banks could no longer sustain the buying of government debt and do banking transactions with the "economy" at the same time.
Not even China can afford to buy our debt anymore.

So the Federal Reserve has been buying it. They are known as the lender of last resort for a reason.

The only option now is EVER LARGER DEFICITS until collapse. Now the reason this happens is because once you get an economy hopped up on steroids(debt/deficits). any cut in those deficits will collapse the economy. Meaning:::the 250-500 billion dollar deficits of 5 years ago are the direct cause of the 1.4 trillion dollar deficits of Obama.
Those deficits have to keep getting larger because the interest on previous debts are taking larger and larger portions. UNDERSTAND

Eventually the debt gets so large that it can never be paid back and default is the only option. We are already past that point. Default here we come.

So if the economy does turn around and start to pick up. Inflation will show it's head. But that inflation will mean we need to increase interest rates. But if we increase interest rates we have to pay more interest on the national debt which will then be unpayable.

So what they are doing is trying to keep the economy flat. Almost no growth. No economic boom will happen because that will cause an inflation spiral. It's the end game.
Anonymous Coward (OP)
User ID: 1438567
United States
06/29/2011 04:48 AM
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Re: For those of you that don't understand why we are fucked beyond comprehension.
Think of it like this.

Have you known someone that was so far in debt that they were paying credits card bills with other credit cards?

That's what has been happening since early 2008.
.
User ID: 1447701
United States
06/29/2011 04:56 AM
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Re: For those of you that don't understand why we are fucked beyond comprehension.
I don't understand - what happens when you pay back the debt. What happens if you default?
 Quoting:


When you pay it back your economy collapses because money is created by debt. When you pay off the debt the money disappears except for the interest. The interest is held as profit by banks.

Debt is a good thing when it is controlled because all money in a fiat economy is created by debt. No debt=No Money.

But when the issuance of debt gets out of control it ends in a spiral of debt. ALWAYS. There is a point of no return.

If Bush and friends hadn't created 6 Trillion dollars in debt during his term we wouldn't have crossed the point of no return. That point was crossed in early 2008 when the banks could no longer sustain the buying of government debt and do banking transactions with the "economy" at the same time.
Not even China can afford to buy our debt anymore.

So the Federal Reserve has been buying it. They are known as the lender of last resort for a reason.

The only option now is EVER LARGER DEFICITS until collapse. Now the reason this happens is because once you get an economy hopped up on steroids(debt/deficits). any cut in those deficits will collapse the economy. Meaning:::the 250-500 billion dollar deficits of 5 years ago are the direct cause of the 1.4 trillion dollar deficits of Obama.
Those deficits have to keep getting larger because the interest on previous debts are taking larger and larger portions. UNDERSTAND

Eventually the debt gets so large that it can never be paid back and default is the only option. We are already past that point. Default here we come.

So if the economy does turn around and start to pick up. Inflation will show it's head. But that inflation will mean we need to increase interest rates. But if we increase interest rates we have to pay more interest on the national debt which will then be unpayable.

So what they are doing is trying to keep the economy flat. Almost no growth. No economic boom will happen because that will cause an inflation spiral. It's the end game.
 Quoting: Dan 1438567

bump
Anonymous Coward
User ID: 1439629
United States
06/29/2011 05:02 AM
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Re: For those of you that don't understand why we are fucked beyond comprehension.
as soon as $1 was lent with interest due we were screwed
Anonymous Coward
User ID: 1403378
United States
06/29/2011 05:07 AM
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Re: For those of you that don't understand why we are fucked beyond comprehension.
As soon as we sopped remembering what the principles of our country were founded on we were fucked.
Anonymous Coward
User ID: 1251628
United States
06/29/2011 05:35 AM
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Re: For those of you that don't understand why we are fucked beyond comprehension.
so what happens next? timing? reccomendations?
JLXC

User ID: 720862
United States
06/29/2011 05:38 AM
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Re: For those of you that don't understand why we are fucked beyond comprehension.
I agree Dan. I just hope when the collapse happens people will remember who caused it for real.

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