How Do You Solve Our Ballooning National Debt Problem?

The experts say you should see hyperinflation, but it's not happening in the world. When compared to GDP Europe and Japan print way more money and the inflation has been in check.
I don't know how the powers that be are preventing the expected hyperinflation. I do know that what is not sustainable will not be sustained. My assumption would be the government still have enough of someone else's money to stave it off like a functional ponzi scheme.
 
I don't know how the powers that be are preventing the expected hyperinflation. I do know that what is not sustainable will not be sustained. My assumption would be the government still have enough of someone else's money to stave it off like a functional ponzi scheme.
I don't know either. All I know is that all eyes are on Japan and what they have done and what has happened has made no sense. Now there could have been some internal capacity issues, slow population growth, etc but they couldn't hit 2% inflation and now they are slowing. They seem to be the guinea pig.
 
Thread starter #63
My understanding was that the fed had been doing this consistently since September and their balance sheet is back to all time highs but there were two overnight rate spikes in September and December. They had excuses for the September spike which I didn’t believe. If the excuses would have been true we it would have been a one time even and it wasn’t. So the concern I have is why the banks aren’t lending. Reminds me of Lehman brothers going to the repo market and not able to get capital because the banks knew they were done. Is something brewing like that.
Everything I have read says the banks are fully capitalized above the regulatory limits and they have all passed their stress tests. They are choosing to do other more profitable things with their excess cash other than fund the overnight repo market.
 
Everything I have read says the banks are fully capitalized above the regulatory limits and they have all passed their stress tests. They are choosing to do other more profitable things with their excess cash other than fund the overnight repo market.
Therein lies the problem. The commercial guys (i.e. jp morgan, well fargo, etc) have plenty of cash. The investment banks, hedge funds etc. have their cash invested and need cash on a daily basis to fund operations. If they cant get cash or have to pay high interest rates because the banks don't want to lend, we have a problem. They say that the system is working as designed because of regulation from Dodd/Frank and that is fine right now. What if we have a crisis down the road and the fed is busy putting out a fire elsewhere?
 
Thread starter #65
Therein lies the problem. The commercial guys (i.e. jp morgan, well fargo, etc) have plenty of cash. The investment banks, hedge funds etc. have their cash invested and need cash on a daily basis to fund operations. If they cant get cash or have to pay high interest rates because the banks don't want to lend, we have a problem. They say that the system is working as designed because of regulation from Dodd/Frank and that is fine right now. What if we have a crisis down the road and the fed is busy putting out a fire elsewhere?
That's the point behind the capital requirements and the stress tests. Sure, it's possible that banks with more capital than they are required to have could blow up but it's not likely all of them would go down.
 
That's the point behind the capital requirements and the stress tests. Sure, it's possible that banks with more capital than they are required to have could blow up but it's not likely all of them would go down.
Remember though, investment banks have different capital requirements than commercial banks. Also, there all kind of other institutions that go to the REPO market every day that need cash but are not regulated by the Dodd/Frank act. I guess my point is why is no one concerned about the Fed having to step in to stabilize this market. Before Dodd/Frank the Fed had to get approval from Congress to do this. The whole point of Dodd/Frank was when disruptions to the REPO existed the Fed could step in instantly to stabilize which is what they have been doing.
 
Thread starter #67
Remember though, investment banks have different capital requirements than commercial banks. Also, there all kind of other institutions that go to the REPO market every day that need cash but are not regulated by the Dodd/Frank act. I guess my point is why is no one concerned about the Fed having to step in to stabilize this market. Before Dodd/Frank the Fed had to get approval from Congress to do this. The whole point of Dodd/Frank was when disruptions to the REPO existed the Fed could step in instantly to stabilize which is what they have been doing.
The "Too Big To Fail" group is well capitalized over and above their minimum regulatory capital requirement and they are the ones who are doing other things with their excess cash. It's up to the Fed and a host of other regulatory agencies to "see into" those who need overnight borrowing to float their boat and be a last resort lender to those folks. If one of them goes belly up they aren't going to take out the whole shebang.
 
The "Too Big To Fail" group is well capitalized over and above their minimum regulatory capital requirement and they are the ones who are doing other things with their excess cash. It's up to the Fed and a host of other regulatory agencies to "see into" those who need overnight borrowing to float their boat and be a last resort lender to those folks. If one of them goes belly up they aren't going to take out the whole shebang.
I'm not worried about the "Too Big to Fail" group although I don't believe they can accurately run real world scenarios for the stress tests. The commercial banks were not the problem from the financial crisis. It was mainly the investment banks that created the problem. The big boys (jp morgan, wells fargo, BofA) had plenty of cash during the crash. The government forced them to take more of our cash to lend out then set the new capital requirements. If one goes belly up it might not take out the whole shebang but it will show that there is bigger underlying problem. Pretty sure as Bear Stearns was going under the "experts" were saying it was an isolated problem and everyone should be out there buying shares of lehman and merrill at the discounted rate. We all know how that worked out.
 
Thread starter #69
I'm not worried about the "Too Big to Fail" group although I don't believe they can accurately run real world scenarios for the stress tests. The commercial banks were not the problem from the financial crisis. It was mainly the investment banks that created the problem. The big boys (jp morgan, wells fargo, BofA) had plenty of cash during the crash. The government forced them to take more of our cash to lend out then set the new capital requirements. If one goes belly up it might not take out the whole shebang but it will show that there is bigger underlying problem. Pretty sure as Bear Stearns was going under the "experts" were saying it was an isolated problem and everyone should be out there buying shares of lehman and merrill at the discounted rate. We all know how that worked out.
That's true but at the time there were no limits on counter party lending. Counter party loans are now part of the capital requirement limits and serve to reduce total capital. I do agree having the retail banks take ownership of the troubled investment banks as part of the bail out was a big mistake.
 

hawglips

Senior Member
Barry set the record straight by saying, "we don't have a spending problem."
 

MudDucker

Moderator
Staff member
Banks aren't the problem with the deficit. Congress is the problem with the deficit.

They need to read Davy Crockett's words when he was in Congress.
 
H
Banks aren't the problem with the deficit. Congress is the problem with the deficit.

They need to read Davy Crockett's words when he was in Congress.
Ha. You should be more worried about the banks than who we vote in Congress. Big banks, investment banks, central bank determine our history, not who is in Congress. Why do you think so many Goldman Sachs guys end up in the government? They are not doing it for the money.
 

MudDucker

Moderator
Staff member
H

Ha. You should be more worried about the banks than who we vote in Congress. Big banks, investment banks, central bank determine our history, not who is in Congress. Why do you think so many Goldman Sachs guys end up in the government? They are not doing it for the money.
I'm not worried about the banks failing. I'm worried about our Congress that spends like a drunken sailor on a perpetual drunk!
 
Thread starter #76
I'm not worried about the banks failing. I'm worried about our Congress that spends like a drunken sailor on a perpetual drunk!
Congress is a threat to the United States.
 
Congress is a threat to the United States.
Politicians come and go. Platforms come and go. Decisions made by large corporations and big banks have a greater impact on our lives than anything that comes out of DC. Sure you can say Obamacare has hurt our pocket the most but if you don’t think that was orchestrated by the insurance companies so the industry could be destroyed leaving only a handful, then your head is in the sand. Back in the day it was J.P. Morgan, Vanderbilt, and Rockefeller running the country. Now the cast has grown to hundreds. You can stay caught up in politics. I used to be obsessed with it, but now I prefer to follow and understand what really impacts my wallet, which are the markets
 

Patriot44

Senior Member
Politicians come and go. Platforms come and go. Decisions made by large corporations and big banks have a greater impact on our lives than anything that comes out of DC. Sure you can say Obamacare has hurt our pocket the most but if you don’t think that was orchestrated by the insurance companies so the industry could be destroyed leaving only a handful, then your head is in the sand. Back in the day it was J.P. Morgan, Vanderbilt, and Rockefeller running the country. Now the cast has grown to hundreds. You can stay caught up in politics. I used to be obsessed with it, but now I prefer to follow and understand what really impacts my wallet, which are the markets
So you are a healthcare expert? I just hit 20 years as a health care employees ranging for worker bee to Senior management, sales, etc, etc.

His head could be in the sand, anything is possible, but your feet are in quicksand.
 

VTRman

Senior Member
So you are a healthcare expert? I just hit 20 years as a health care employees ranging for worker bee to Senior management, sales, etc, etc.

His head could be in the sand, anything is possible, but your feet are in quicksand.
He's pretty much right on the money.

No pun intended.
 
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