Who punishes America for late loan payments ?

[Dilloduck]

http://news.yahoo.com/feds-dose-kitchen-table-economics-124603046.html

[Gunny]

http://news.yahoo.com/feds-dose-kitchen-table-economics-124603046.html

I doubt the government, but Obama in particular, could handle a family budget. If the federal budget is any indication, I sure as Hell wouldn't bet on it.

[Dilloduck]

thanks for the response--anyone know the answer ?

[red states rule]

thanks for the response--anyone know the answer ?

There will NOT be a "late" payment since the government will continue to collect taxes if the debt ceiling is not raised - thus the interest payments on the debt will be paid

Unless Obama orders the US Treasury NOT to make the interest payment so default will happen

[fj1200]

thanks for the response--anyone know the answer ?

The markets. IF there is a default then the markets respond by demanding higher rates. The article seems to ride on the premise that no increase in the DL automatically means default; Not true, revenues are coming in that would pay the interest and roll the debt. Besides, the Constitution says...


The validity of the public debt of the United States... shall not be questioned.

If that matters anymore.

[Dilloduck]

The markets ? Which market is going to tell the US that we are late paying them a loan and owe them a penalty fee ?
Do these markets have a name and a CEO ?

[fj1200]

The markets ? Which market is going to tell the US that we are late paying them a loan and owe them a penalty fee ?
Do these markets have a name and a CEO ?

Are you aware how the bond market works?

[Dilloduck]

No--please explain. I read an article on how America will have to pay a penalty if they are late on a loan payment. I wanna know exactly who is charging us that penalty.

[fj1200]

No--please explain. I read an article on how America will have to pay a penalty if they are late on a loan payment. I wanna know exactly who is charging us that penalty.

You might want to post that article. IF we default the value of the bond will drop because of the lower likelihood of repayment. Lower bond prices drive up interest rates.

[Dilloduck]

ie--everything is only worth what people are gambling that it's worth. Let's see what the world markets think America is worth and default.

[fj1200]

ie--everything is only worth what people are gambling that it's worth. Let's see what the world markets think America is worth and default.

Gambling has nothing to do with it. You'd like to ignore Article 6?

[Dilloduck]

The Market ? You're kidding right ? Gambling has everything to do with it and if you have some hot inside information it's illegal. Not that it would stop anyone.

[fj1200]

The Market ? You're kidding right ? Gambling has everything to do with it and if you have some hot inside information it's illegal. Not that it would stop anyone.

Oh geez. Another investing is not gambling discussion. :rolleyes:

[Dilloduck]

Downplay it all you want but America just bailed out some gamblers who were to big to fail. It cost the taxpayer quite a bit actually.
Really it's a credit vs real money discussion. Who is going to come knocking on America's door if we default on what we were credited?

[fj1200]

Downplay it all you want but America just bailed out some gamblers who were to big to fail. It cost the taxpayer quite a bit actually.

Not quite the subject of the discussion now is it?


Really it's a credit vs real money discussion. Who is going to come knocking on America's door if we default on what we were credited?

It's a discussion about sovereign credit, no one will come knocking they will just demand higher rates.

[Dilloduck]

Who ? Who is going to charge us higher rates ? The Queen of England ?

[fj1200]

Who ? Who is going to charge us higher rates ? The Queen of England ?

Whatever dude. Act ignorant.

[Dilloduck]

seriously---who is America's banker?