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At 4/4/07 06:44 PM, JakeHero wrote:

At 4/4/07 06:25 PM, mayeram wrote: Please don’t call me an idiot when you don’t understand what you are talking about.

The hypocrisy is overwhelming.

Even if what I say is bullshit (which I don’t think it is) it isn’t hypocrisy, since I never called him an idiot...

P.S. Thanks for backing me up chazeverest, that’s what I meant by no one would want to trade with us. It’s not really that they wouldn’t want to; more that they wouldn’t trust America to trade on credit anymore.

At 4/4/07 07:13 PM, Der-Lowe wrote:

At 4/4/07 06:51 PM, MortifiedPenguins wrote:

But that would precipitate America's fall, you would be letting China take over.

I'm quite fine with that.

At 4/5/07 10:06 AM, Twilight-Knight wrote:

At 12/1/04 06:03 PM, Willsphermalothohnyu wrote:

1) Because of Bushes economical plans and warfare USA will have a foreign debt of 3000 billion dollars over the next ten years

Do you know how many IOU's other countries have for the US? I don't know if I said that correctly. I mean that a good lot of countries still owe us a lot of money. Like England for example. Remember Lend and Lease?

I would say you picked the wrong president.

Lend Lease was 60 years ago.

The British paid their debt to us with interest. They recently made the last payment on a loan taken out just after WWII which enabled them to get back on their feet after six years of war.
Yes they had six years 1939 to 1945
For years they were the only ones who stood up to Hitler and Musolini.

The Brits don't owe us any more money.

I would say you picked the wrong prime minister. : P

At 12/1/04 06:03 PM, Willsphermalothohnyu wrote: 1) Because of Bushes economical plans and warfare USA will have a foreign debt of 3000 billion dollars over the next ten years

Way over 3 trillion, maybe lowered debt.

2) Since Bush was reelected the dollar has devaluated by more than 16% and its still loosing value, this is not just an economic thing, its also an imortant mental factor. (also considering the Euro is alot higher than the dollar now)

True, we need to improve.

3) The Israel Palestinian conflict has never been worse due to failed foreign politics. The Arabian hatred towards USA is larger than ever.

Well, ever since we invaded Iraq, and killed Hussein, the Taliban, Al-Qaeda, and every extremist are pissed off at us, and they want Israel off of the map as well.

4) After the disaster in Iraq hostile countries have begun insulting USA openly in the UN. Iran, Northkorea and many more have begun constructing weapons of mass destruction openly. They do no longer feel that USA has economic, diplomatic or military means to step in.

It is because Bush wants to sanctions them, if I was president, I would blockade Iran and NK, and not give them shit, until they give up and disarm their weapons, or nuke them.

5) The relationship between Europe and USA is colder than ever. In Denmark and many other countries people are banning American goods, movies and products, and politicians here dont take Bush serious, they see him as a degenerate (not stating oppinions this is facts!)

And they are starting to hate us because of the Iraq problem.

I would say you picked the wrong president.

Kerry might have been worse, well at least we won't have to worry about Bush. But, he might even send all of the US troops to Iraq to end it(then we are fucked). At least the next president won't be Bush.

usa a superpower ha ha ha ha ha ha no never all that will happin is u guys will make up something new and takeover someone and take whats not yours but if u were thinking of usa being a superpower in that way than nvm yes it is but if thats not and u think usa will have alot of money and power than nope it will never happin and all the money that u guys are geting now u guys will never see and that funnny cuse u guys are dieing for nothing hahahahahahah but whatever do what u whant its not like i am going too hell for takeing someone over for money and kill more ppl than u kill in the us so ya usa will never be a superpower ever it will just be a power gun happy even more in 10 years.....

The impact of defaults are overrated, and believe me, I'm from the nation that has had the biggest default in history of mankind.

5) The relationship between Europe and USA is colder than ever. In Denmark and many other countries people are banning American goods, movies and products

I have no problem with this, personally. The US supplies much more to Europe than Europe does to the US. this is kinda like shooting yourself in the foot.....

At 4/5/07 05:28 PM, Imperator wrote:

I have no problem with this, personally. The US supplies much more to Europe than Europe does to the US. this is kinda like shooting yourself in the foot.....

Not it doesn't. The US relies on the EU economically as much as the EU does on the US.

http://ec.europa.eu/trade/issues/bilateral/co untries/usa/index_en.htm

At 4/5/07 05:47 PM, zzzzd wrote:

At 4/5/07 05:28 PM, Imperator wrote:

I have no problem with this, personally. The US supplies much more to Europe than Europe does to the US. this is kinda like shooting yourself in the foot.....

Not it doesn't. The US relies on the EU economically as much as the EU does on the US.

http://ec.europa.eu/trade/issues/bilateral/co untries/usa/index_en.htm

Ah....well, I read elsewhere that the US imports about 18% from Europe, but Europe imports 25% from the US. That article makes it even at 25% both ways.......

Guess I need a 3rd opinion for the tie-breaker......

At 4/5/07 06:00 PM, Imperator wrote:

Ah....well, I read elsewhere that the US imports about 18% from Europe, but Europe imports 25% from the US. That article makes it even at 25% both ways.......

Guess I need a 3rd opinion for the tie-breaker......

http://www.census.gov/foreign-trade/balance/c 0003.html

This claims that the US imports a fair amount more from the EU than it exports to the EU.

In 2006 US trade with EU

Exports: 213,957.8
Imports: 330,553.3

Never the less both rely on each other completly.

At 4/5/07 09:18 AM, chazeverest wrote: They wouldn't want to buy them because if we did default we wouldn't be seen as trustworthy.

I'm getting kinda tired of dumbing down my points. So I'll do it again. The government is not synonymous with the national economy. People would lose faith in the central government itself, but as long as the economy offers profitability, then commerce will go on.

Whose to say we don't take an order for goods or products and then simply fail to deliver.

The producer =/= the government. Last time I checked, Pizza Hut was able to deliver me a pizza on time.

Afterall we took on credit that we simply didn't repay.

No. Infact, our debt is proportionally smaller than that of other countries. The only reason our is so high is because of the size of our economy.

We could pay off any debts we might have incurred easily. Considering our annual earning amount to over 13 trillion a year. The problem is this would mean we'd have the balance the budget. The republicans in power want to lower taxes for all classes, but spend on big dollar programs. The democrats want to raise taxes, but finance dogshit programs. So you could see our misfortune.

A currency's value is dependant upon whether other countries and traders believe that the money is worth something,

That's what I said. Kinda of what I meant when I stated "trust."

and that is based on whether other countries or investors believe you have a strong economy.

Remember kids; government =/= economy

If you default on the debt, then you will be seen as having a poorly run and weak economy.

Do I actually have to explain to you the difference between a central government and an economy?

If you default on your debt then the world will not see the USA as trustworthy and will cease to invest in it's currency, which is what pushes the value of the currency up.

I'm actually getting tired of regurgitating the difference between the federal government and a people's economy. We live in capitalism, this means the government is less involved in the division of labor and management of a nation's economy. If we lived in socialism or communism, then it would spell our doom since the economy and government would be so closely intertwined, but we don't live in such a system.

It would no longer be a stable economy if it defaulted on it's debt. Since all trade is based on credit, no one would want to do business with us.

Holydogshit, so you're telling me people would all of a sudden decide "Well, a deal with this business would be most beneficial for me, but since the government defaulted on its debts, I think I'll go somewhere else and lose money out of my own wallet?"

I don't think you have any right to talk, you obviously know nothing about how economies work and how a currency is valued.

And you obviously have very shitty reading comprehension. :)

You need to have credit to buy and sell. Buying and selling and the level you are talking about isn't just "how much?" "$5" and the buyer hands over $5

Perhaps I didn't phrase that correctly. You do not need credit to go to work, earn wages for your hours/service and then go to grocery store to buy food? If the government defaults no one would buy anymore bonds, but foreigners would continue to barter and trade with the people of the US since these same people would be economically strong due to the untouched infastructure and commerce.

And selling is done on the basis of orders being placed for goods that are not yet produced, if we are untrustworthy enough to simply not pay our international debt then why would any buyer trust us to not just take his money and not supply the goods.

Um, for the last time the government(governing body of a nation) is not the same as the economy(businesses) in the US. I advise you learn the difference.

An addition, you need credit to buy the raw materials required. We have some materials, but not everything we need.

Here's another idea. You could pay for it in CASH. Honestly, are you just making up this bullshit as you go? I never said I was an expert on the economy, but you and your predecessor pretending you do annoys me. In short, if you tried to defend mayer you did a shitty job. Do you even know what we were fighting about in the first place?

At 4/5/07 06:21 PM, JakeHero wrote:

At 4/5/07 09:18 AM, chazeverest wrote:

We could pay off any debts we might have incurred easily. Considering our annual earning amount to over 13 trillion a year. The problem is this would mean we'd have the balance the budget. The republicans in power want to lower taxes for all classes, but spend on big dollar programs. The democrats want to raise taxes, but finance dogshit programs. So you could see our misfortune.

What I would do to have a traditional economic conservative instead of Bush. What I would do for a balanced and minimized budget.

and that is based on whether other countries or investors believe you have a strong economy.

Remember kids; government =/= economy

Actually, he's somewhat right. Investors and speculators are extremely jumpy and any flucation, such as a massive selling in China wich recently caused the big drop we had, can destabilize the power of the currency. No matter what, the economy and the government are tied together, trust in the economy falls in with trust for the government. The Great Depression taugh us that if anything.

very very unlikely that America will no longer be a super power in 10 years time, i mean look at the Roman Empire that was in untold wars but they never truly collapsed in ... well ... a while (dunno for definite how long they was a empire for)

America got a very good economy and it still has today even after WW2, Vietnam etc, it's also got the latest technology in warfare now unless there a really large coalition against the USA and America is forbid to use Nukes and China and the other potential super powers get really strong, i can see America still being a super power in over 50 years

At 4/4/07 06:51 PM, MortifiedPenguins wrote:

But thats the thing. We don't need a complete isolationist policy, just a more relevant use of it. We still view the world in Cold War terms and still operate under that mantra.

Thats because the Cold War did not really end. Its rules may have changed a bit, but the Cold War did not end.

Scale back, let the people decide what they want, let the world take care of itself.

Sound advice.

At 4/5/07 05:17 PM, hoodman wrote: usa a superpower ha ha ha ha ha ha no never all that will happin is u guys will make up something new and takeover someone and take whats not yours but if u were thinking of usa being a superpower in that way than nvm yes it is but if thats not and u think usa will have alot of money and power than nope it will never happin and all the money that u guys are geting now u guys will never see and that funnny cuse u guys are dieing for nothing hahahahahahah but whatever do what u whant its not like i am going too hell for takeing someone over for money and kill more ppl than u kill in the us so ya usa will never be a superpower ever it will just be a power gun happy even more in 10 years.....

I had trouble trying to understand what you said, your paragraph has no periods, or indications of stopping, there are also some spelling errors. What is your point here?

At 4/5/07 09:48 PM, Raveinx wrote:

At 4/4/07 07:13 PM, Der-Lowe wrote:
But that would precipitate America's fall, you would be letting China take over.

You make it sound like a bad thing. But hey! Its actually good! If China takes over, the Falklands may be Argentinian once again. If Argentina becomes a close friend of China, the British would not stand a real chance. Argentina would suddenly have ultra high tech weapons to hit back at the British troops.

There unltra high tech weapons, Super Entendard, Exocet, Mirage etc etc didn't help them in 82 and it won't help them now or later. The U.K. kicked yo asses.

At 4/5/07 09:48 PM, Raveinx wrote:

At 4/4/07 07:13 PM, Der-Lowe wrote:
But that would precipitate America's fall, you would be letting China take over.

You make it sound like a bad thing. But hey! Its actually good! If China takes over, the Falklands may be Argentinian once again. If Argentina becomes a close friend of China, the British would not stand a real chance. Argentina would suddenly have ultra high tech weapons to hit back at the British troops.

South america is more likely to have stronger connections to the EU than China. And whats saying the EU won't have strong connections with China as well.
Seeing as the whole of the EU (excluding Spain) and the US are on Britains side when it comes to the falklands. I doubt China will risk a World War to help Argentina get some rocks back which really aren't theres anyway.

I dearly hope there isn't another war over the Falklands. But they never will be Argentinias.
They will be British Until they want independence.

At 4/6/07 09:41 AM, chazeverest wrote:

At 4/5/07 09:48 PM, Raveinx wrote:

At 4/4/07 07:13 PM, Der-Lowe wrote:
But that would precipitate America's fall, you would be letting China take over.

You make it sound like a bad thing. But hey! Its actually good! If China takes over, the Falklands may be Argentinian once again. If Argentina becomes a close friend of China, the British would not stand a real chance. Argentina would suddenly have ultra high tech weapons to hit back at the British troops.

There unltra high tech weapons, Super Entendard, Exocet, Mirage etc etc didn't help them in 82 and it won't help them now or later. The U.K. kicked yo asses.

What i like to know is whats the fork land got to do with America being a super power in 10?

Also thats sounds like a good idea ... a cure for the already war torn world is ... another bloody war between Argentina and England >_>

yes i know i spelt Falklands wrong also soz for double posting

At 4/5/07 06:34 PM, MortifiedPenguins wrote: What I would do to have a traditional economic conservative instead of Bush. What I would do for a balanced and minimized budget.

I think you and I are out of luck. That kind of conservative hasn't been popular within the Republican Party since the 1980s(Not to say Reagen wasn't a great President). Just like the Zell Miller democrat hasn't been mainstream in the Democratic Party since 1968.

Actually, he's somewhat right. Investors and speculators are extremely jumpy and any flucation, such as a massive selling in China wich recently caused the big drop we had, can destabilize the power of the currency. No matter what, the economy and the government are tied together, trust in the economy falls in with trust for the government. The Great Depression taugh us that if anything.

I'm not denying decisions the government can make will not have repercussion on the economy; the point I've been consistently making is that the economy would not go to shit if the central government decides to default.

Any countries that have defaulted on their loans have either gone to shit or already were, Why would it be different for us.

At 4/6/07 10:33 AM, chazeverest wrote: Any countries that have defaulted on their loans have either gone to shit or already were, Why would it be different for us.

Really? Can you give me the list of every country that's ever default and turned from a prosperous civilization to a thirdworld shithole? No, you can't. Because countries that have the above don't usually default on their debts. It's always a last resort.

At 4/6/07 10:35 AM, JakeHero wrote:

At 4/6/07 10:33 AM, chazeverest wrote: Any countries that have defaulted on their loans have either gone to shit or already were, Why would it be different for us.

Really? Can you give me the list of every country that's ever default and turned from a prosperous civilization to a thirdworld shithole? No, you can't. Because countries that have the above don't usually default on their debts. It's always a last resort.

You know what, you're right on that one. I can not give you a list of First World countries that have defaulted. I can however give you a list of developing countries that were once almost to first world level.
A list of countries that have defaulted on sovereign debt in the period 1985-2002 is presented in Table 1. It is remarkable that all of the credit events took place in the period 1998-2001. This illustrates the limited history and thereby the difficulties in assessing credit risk for various countries.

COUNTRIES WITH DEFAULTED SOVEREIGN DEBT 1985-2002 Table 1
Year Country Amount (million dollars)
1998 Pakistan 750
- Russia 73,336
- Ukraine 1,422
- Venezuela 270
1999 Ecuador 6,603
2000 Peru 4,870
- Ukraine 1,063
2001 Argentina 82,268
- Moldova 145
Note.: Only includes countries that were rated by Moody's during the period. Amounts are based on the dollar exchange rate at the time of the event.

Source: Moody's.

Argentina's suspension of payments
The complex risk pattern can be illustrated by considering the largest credit event in history in terms of amount, namely Argentina's suspension of payments in 2001.

Throughout the time that Argentina has had a rating (since 1986) the rating agencies always assessed that there was a certain probability that Argentina would default on issued bonds. For example, Moody's has always rated Argentina's bonds at Ba or lower, i.e. "speculative grade".[5] Since 1997 the rating agencies have gradually downgraded Argentina's debt, resulting in a strong widening of the spreads to secure government bonds, cf. Chart 6.[6]

YIELD SPREAD FOR US AND ARGENTINEAN GOVERNMENT BONDS Chart 6

Source: J.P. Morgan.

Even with these ratings, in the period up to Argentina's suspension of payments it was probably difficult for investors to assess the probability of actual default. Many other countries besides Argentina, e.g. neighbouring Brazil, have a low credit rating from Moody's without having defaulted on their sovereign debt. This illustrates how a modest body of data makes it hard to quantify the risk of default.

Argentina failed to service its loans on 3 January 2002. It was already clear in autumn 2001 that Argentina would probably not fulfil its obligations. As a consequence, the price of Argentinean government bonds fell strongly, cf. Chart 6.

One month after the default Argentinean government bonds were being traded at prices which implicitly set the present value of the bonds at approximately 30 per cent of the nominal value. In other words, in spring 2002 owners of Argentinean government bonds could divest the bonds against a loss of approximately 70 per cent.

This price indirectly reflects the market participants' expectations of the outcome of retaining the bonds and awaiting the debt restructuring negotiations between Argentina and its creditors. Such a process is often an extremely complex and protracted legal struggle. The debt was not restructured until June 2005 and it entailed that creditors' claims were written down by approximately 75 per cent, according to the IMF. The strong narrowing of the credit spread in Chart 6 reflects the restructuring.[7] This narrowing is remarkable in view of Argentina's chequered credit history. Among other things it reflects a substantial decrease in Argentina's overall debt, and especially its external debt, as a result of the restructuring, which all other things being equal makes it easier for Argentina to service the debt in the future. In addition, the Argentinean government has taken various legislative steps to make it more difficult (more expensive) to default on sovereign debt in the future.

The case for Argentina is far from closed, however, since some creditors do not accept the restructuring and are seeking to recover a larger share of the debt via the courts.
Conclusion

The interest spread reflects risk and compensation for risk. There is no "free lunch" since any expected additional return compared to a risk-free yield will entail risk. The increase in bond issues by business enterprises and countries with a low credit standing imposes higher demands on investors' ability to analyse and assess the risks on bond investments. Credit spreads are highly volatile and reflect especially that the price of risk varies strongly over time. This makes it more complicated for individual investors to use the credit spreads on the individual bond series to precisely assess the underlying credit risk. There is also uncertainty regarding up- and downgrading by the rating agencies.

If debt is defaulted, recovery or restructuring is often a protracted and complicated business, as in the case of Argentina's default on its sovereign debt in 2001.
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[1] The price reaction to PurusCo's bid was amplified by the fact that previously issued ISS bonds would not take priority over the newly-issued debt.

[2] The article considers credit risk in more detail. Conversion risk relates to callable bonds, e.g. certain Danish mortgage-credit bonds, and describes the risk that the borrower calls the bond on terms that are fixed in advance, e.g. redemption at par. Liquidity risk is the risk that the price of financial assets with a low trading volume (low liquidity) fluctuates more than similar assets with a high trading volume. Conversion risk and liquidity risk will not be considered further in this article.

[3] The use of ratings is described in more detail by Kristian Sparre Andersen and Anders Matzen, The Use of Ratings in the European Capital Markets, Danmarks Nationalbank, Monetary Review, 3rd Quarter 1998.

[4] The section solely considers default on government bonds. Sovereign default on other types of debt, e.g. bank debt, occurs more often than default on government bonds. A number of countries with low credit standing in South America, Africa, Asia and eastern Europe have only gained access to international financial markets in the course of the last few decades.

[5] Moody's ratings are Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C, where Aaa is given to governments with the highest credit standing, and C is immediate default. Generally, the first four ratings are given to governments with a good credit standing and these are often called "investment grade". Ba and below are "speculative grade" (or "junk bonds"), since these ratings signal a degree of probability of default. So far no country that has been rated "investment grade" by Moody's has defaulted on its sovereign debt.

[6] The background to Argentina’s problems is described in Jens Thomsen, Several reasons for Argentina’s crisis (in Danish only), Udenrigs (Abroad), no. 3, 2002.

[7] It should be noted, however, that the strong narrowing of the spread does not reflect high increases in bond prices, but that the defaulted bonds have been replaced by the bonds behind the new loans. The new bonds have been rated B by Moody's.

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yay Argentina!! :D

At 4/6/07 02:17 PM, Der-Lowe wrote: yay Argentina!! :D

Yay Der-Lowe or should I say The Lion.

At 4/6/07 03:04 PM, chazeverest wrote:

At 4/6/07 02:17 PM, Der-Lowe wrote: yay Argentina!! :D

Yay Der-Lowe or should I say The Lion.

*clears throat*
Call me Der-Lowe.

At 12/1/04 06:03 PM, Willsphermalothohnyu wrote:

Is USA a superpower in 10 years?

Not likely. USA is quickly growing weak within World affairs. Americans seem to be tired of being the superpower, they are starting to fall behind politically, and have been pretty much challenged by most nations in the world as of late, with no perceptible reaction. Thus, nobody respects the USA anymore, and that will accelerate its downfall.

At 4/7/07 01:35 AM, katana-klan wrote:

Thus, nobody respects the USA anymore, and that will accelerate its downfall.

Which is because the "rest of the world" is full of weak morons driven by the media. Hey, just like you!

America might face a more significant competition for the status itself.. but I highly doubt it'll lose it outright.

At 4/6/07 09:41 AM, chazeverest wrote:
There unltra high tech weapons, Super Entendard, Exocet, Mirage etc etc didn't help them in 82 and it won't help them now or later. The U.K. kicked yo asses.

Because Argentina only had like 8 mirages and 10 exocets... It it were more like 8000 mirages and 10000 exocets, story could have been different.

And I am not saying that China ITSELF will get into a World War to help Argentina. But I am saying is that if China becomes the first superpower in the World, it may facilitate some better weaposn technology to countries that could be potential allies against occidental powers. Yup, Muslim nations will benefit a lot from this, by the way.