The Chinese will get their money back Wen hell freezes over.
US and UK government paper, or as they will soon be known... junk bonds.
This may well prove to be the best thing to ever happen to us as it will make it much harder for Leviathan to accumulate the money it needs to do the things it does.
This may well prove to be the best thing to ever happen to us as it will make it much harder for Leviathan to accumulate the money it needs to do the things it does.
You might be right in the long run, Perry. In the short run, though, that will sting like a self-appendectomy with only lite beer to dull the pain.
Gape, if it meant that my kids could live without having to pay for our debt, I'd ask for the scalpel and beer immediately.
My only request would be that the beer be Wadworth 6X instead of that lite piss.
So when will the Chinese government return the foreign-owned property it seized in 1949?
As the old saw has it, (slightly updated):
If you owe your bank $1million you might be in trouble.
If you owe your bank $100trillion, they might be in trouble.
Scapegoating the Chinese.
Nothing like a bit of xenophobia to shift the blame from the morons in Wall Street and the City.
"I can assure the Great Nation of China, that America honors Her debts, and that your money, invested in good faith, will be repaid with the same care and diligence we exhibit to all of our good friends."
- President Pinocchio
Not sure if I mentioned it here before, but one option is for us (the US) to sell Taiwan to China. China buys a whacking great note with the understanding that our only reaction to their invading Taiwan will be to default on it 'as punishment'.
(I know I'm cynical, but am I cynical enough?)
Indeed, the country's in the very best of hands. Professor Reynolds is making a reference to the musical number of the same name from "Lil Abner." One of the best parodies of what government can and will promise comes from the same fertile mind, Al Capp. Capp gave us the "shmoo" in the late 40's, and no invention made since better captures the thoughts of those who wait for the lightworker that is Obama to provide for their every need.
A shmoo is shaped like a plump bowling pin with legs. It has smooth skin, eyebrows and sparse whiskers - but no arms, nose or ears. Its feet are short and round but dexterous, as the shmoo's comic book adventures make clear. It has a rich gamut of facial expressions, and expresses love (often) by exuding hearts over its head.
Cartoonist Al Capp ascribed to the shmoo the following curious characteristics. His satirical intent should be evident:
* They reproduce asexually and are very prolific. They require no sustenance other than air.
* Naturally gentle, they require minimal care, and are ideal playmates for young children.
* Shmoos are delicious to eat, and are eager to be eaten. If a human looks at one hungrily, it will happily immolate itself, either by jumping into a frying pan, after which they taste like chicken, or into a broiling pan, after which they taste like steak. When roasted they taste like pork, and when baked they taste like catfish. (Raw, they taste like oysters on the half-shell.)
* They also produce eggs (neatly packaged), milk (bottled grade-A), and butter - no churning required. Their pelts make perfect bootleather or house timber, depending on how thick you slice it.
* They have no bones, so there's absolutely no waste. Their eyes make the best suspender buttons, and their whiskers make perfect toothpicks. In short, they are simply the perfect ideal of a subsistence agricultural herd animal.
* The frolicking of shmoon is so entertaining (such as their staged "shmoosical comedies") that people no longer feel the need to watch television or go to the movies.
* Some of the more tasty varieties of shmoo are more difficult to catch. Usually shmoo hunters, now a sport in some parts of the country, utilize a paper bag, flashlight and stick to capture their shmoos. At night the light stuns them, then they can be whacked in the head with the stick and put in the bag for frying up later on.
Maybe we can even get these adorable little guys to soak up the excess carbon dioxide Al Gore is so agitated about. :)
Mezzrow, that was great! Thanks for the Schmoo reference. I remember many years ago watching some leftwing economist talk about this character as the great socialist utopia figure, that is hated by capitalists. The socialist utopia is a world without scarcity - in other words, without the problem of having to decide uses for resources. That is the great stumbling block of socialism.
As for Relugus, WTF?:
Scapegoating the Chinese. Nothing like a bit of xenophobia to shift the blame from the morons in Wall Street and the City.
Who is scapegoating them? The thrust of my article is and the Bloomberg item is, if anything, the reverse. The Chinese have been net buyers of US government bonds, which has - for a while - enabled the US government to borrow for a cheap amiount of interest. Now that is coming unstuck.
Your fixation with the "morons of Wall Street and City" is becoming a bit of a broken record.
At the risk of continuing my penchant for pedantry:
Any creditor relying on the FULL FAITH & Credit of the U.S. Guvmint should (and many do) take note of the following:
1. The Credit Default Swaps Spreads in the world markets.
2. The trend in the U.S. toward Debtor Preference.
When I attended Law School (close to 60 years ago now) the course and texts subject was Creditors' Rights. It is now Debtors' Rights & Creditors' Remedies . That trend should tell us something. Do we listen and observe?
3. If the U.S Congress will, through its Constitutionally ordained bankruptcy powers provide that a Debtor may be discharged of a secured obligation, a mortgage (faith in which was the basis of the contract of debt), can we not expect that same view to take root with respect to other debt, even the sovereign debt of the U.S.???
4. The tyranny of Parliaments (see 1776, et seq.) and of Congressses can be recognized by other tyrants (China). Will Sic Semper win out over Semper Fi??
Sorry to be so late posting this. But, I have been busy on tax forms!
A few years ago I would have taken issue with RRS's Point #3, but with the current talk (apparently about to become reality) of granting bankruptcy judges "cramdown" powers, I am no longer so sanguine. I fear that it might actually be constitutional, too: as I read it, Article 1, Section 10, Clause 1 only prohibits the states, but not the federal government itself, from enacting a law "impairing the obligation of contracts".
The Federal government is not given any power to violate contracts - therefore, as made clear by the Tenth Amendment, it has no such power.
The violation of contracts would also, of course, violate the Ninth Amendment.
Of course to those who hold that "the common defence and general welfare" is a catch-all power (rather than the purpose of the powers listed in Article One, Section Eight) then the Feds can indeed break contracts - and gas the Jews, and do most anything they feel like doing.
However, in this case no violation of contract need occur.
The T. Bills are in Dollars (not Chinese currency) - so the government can just print Dollars and pay the debt.
"But that is not what the Dollar is supposed to be".
Yes I know, "coin money" - in opposition to the "not worth a Continental" of the Continental Congress (no State shall make anything other than gold and silver coin legal tender was assumed to apply to the Feds to - via the Tenth Amendment).
However, the statists have their pet court - and if they lose a case in it (for example the first Greenback case) they just appoint some more judges and run the case again (the second Greenback case).
And as most people will not fight to protect the Constitution ("that is the job of the Supreme Court") it gets used as toilet paper.
Sorry it gets "interpretated".
So de facto default (via the expansion of the money supply) will be the way.
The Federal government is not given any power to violate contracts - therefore, as made clear by the Tenth Amendment, it has no such power.
The violation of contracts would also, of course, violate the Ninth Amendment.
Of course to those who hold that "the common defence and general welfare" is a catch-all power (rather than the purpose of the powers listed in Article One, Section Eight) then the Feds can indeed break contracts - and gas the Jews, and do most anything they feel like doing.
However, in this case no violation of contract need occur.
The T. Bills are in Dollars (not Chinese currency) - so the government can just print Dollars and pay the debt.
"But that is not what the Dollar is supposed to be".
Yes I know, "coin money" - in opposition to the "not worth a Continental" of the Continental Congress (no State shall make anything other than gold and silver coin legal tender was assumed to apply to the Feds to - via the Tenth Amendment).
However, the statists have their pet court - and if they lose a case in it (for example the first Greenback case) they just appoint some more judges and run the case again (the second Greenback case).
And as most people will not fight to protect the Constitution ("that is the job of the Supreme Court") it gets used as toilet paper.
Sorry it gets "interpretated".
So de facto default (via the expansion of the money supply) will be the way.
Well put, Paul. You are absolutely correct that the catch-all "general welfare" clauses do not, and cannot, expand the specific powers delegated to the federal government. Those who make such arguments simply demonstrate their ignorance of the fundamental principles of statutory construction.
I certainly hope that you're correct in your conclusion that the "impairment of contracts" by the federal government (via "cramdown" powers in bankruptcy) would be held to be violative of the Tenth Amendment (I don't see how the Ninth appies). However, the Tenth is the "forgotten amendment", and has almost never been applied (or even mentioned) by the Supreme Court, which I think is deplorable but is nonetheless the case. Thus I fear that it won't be held to prohibit "cramdown" power. This fear is exacerbated by the fact that such power already exists in commercial bankruptcies; current talk is merely about expanding it to consumer bankruptcies. I haven't researched this (perhaps RRS can offer some insight here), but surely some creditor has already challenged this in a commercial setting, and lost. I hold out no hope that a challenge in the consumer setting will fare any better.