4 ms·

Theyre crashing the market to monetize the debt at cheaper rates

by ldjkfkdsjnv 2y ago

shuckles 2y ago
This is the dumbest theory I’ve heard so far.
amazingamazing 2y ago
go look at trump interviews in the 80s and 90s. the guy has always loved tariffs.
- ldjkfkdsjnv 2y ago
  yes but this is a dual objective move
triceratops 2y ago
But why?
- ldjkfkdsjnv 2y ago
  because the country cant manage the debt, and us equity growth is partly due to rampant government spending, not true growth
  - triceratops 2y ago
    > us equity growth is partly due to rampant government spending The US government bought a lot of equities? If yes, isn't crashing the stock market bad for the government? If no, then what does that mean, exactly? The government spends a lot of money buying stuff from companies in the S&P 500? Enough to send their prices sky high? How does crashing the stock market fix that?
    - ldjkfkdsjnv 2y ago
      its too complicated to explain, and i am completely shook by these losses. but there is a growing theory that there is a relationship between government debt/spending and asset prices. the last few years, up to 25% of total USA employment is indirectly from the government. the last 25 years has been a hallowing out of actual economy, replaced with debt, financial engineering, low interest rates, and the like. the growth is mostly fake, which is the why the middle class is almost gone and no one can afford anything
      - theGnuMe 2y ago
        prove it.
        ldjkfkdsjnv 2y ago
        trump is trying to fix it by onshoring manufacturing, im not supporting that solution, but thats whats going on
      - apothegm 2y ago
        I agree with you on the plague of financialization. Just not that it’s driven by government debt. My take is that it’s caused by growing inequality and trickle-up redistribution of money from those who don’t have enough to spend to those who already have too much and thus will save/invest rather than spending.
        fuzzfactor 2y ago
        This is serious. You're both right. In the type of consumer economy I saw "recover" after the Nixon Recession did its permanent damage, it became possible for the Feds to juice the economy more than ever (after stability was finally achieved), by adjusting interest rates and increasing spending in the right areas it would be amplified and they effectively gained more and more control of overall prosperity, more than any other one entity. This couldn't have happened earlier until the wealth held by the government was beyond a certain ratio to that held by the combined population. In simplest terms disregarding important things like liquidity or absolute net worth. It wouldn't have been so bad except people got a lot poorer and vast opportunities were lost forever in a few short years. Government money had a much stronger seeding effect after that which was then relied on heavily ever since, but gradually squeezing the whole time. Biden unleashed a bit of this and it still worked to some degree, just not enough people ended up feeling more prosperous before it was too late. Really helps the economy most if the ultimate beneficiaries are ordinary working people and are widely dispersed, but a lot of it does not come back to the Treasury and builds up as debt. In a less-stable environment, increased government spending is less likely to hit its intended target, plus a great abundance of consumers have been tapped out and don't have the resources to amplify it and collectively bail out anything this time, which was the leverage that worked in the past.
  - comrade1234 2y ago
    It’ll save about $300B over ten years vs wiping out $6T in stock valuation in a month.
  - joegibbs 2y ago
    Aren't there better ways to manage the debt than crashing trade? Print a ton of money and deliberately cause inflation, that wouldn't be as harsh as tariffs. Print the money and use it to buy foreign currency, that would weaken the dollar.
    - zozbot234 2y ago
      The better way is what Clinton did throughout his terms as President - cut government waste and run budget surpluses. It doesn't have to hurt if you do it gradually enough. Some commentators will argue that the U.S. enjoys some sort of unique exceptionalism due to the dollar being a "reserve currency" and whatnot, such that they should not attempt to do this. These commentators are wrong.
      - roflyear 2y ago
        I think people will tend to argue two points: 1) Debt isn't bad in itself, running a deficit isn't bad in itself. (though they can be bad in some situations!) 2) The US is in the position to "fix" the debt problem in a lot of creative ways (I mean, some pro-tariff are arguing this too, right? just that the creative way is tariffs).
UncleMeat 2y ago
Hard to motivate rates dropping by introducing high inflation. Will Trump also illegally take command of the fed board too?
roflyear 2y ago
Can you explain how this will work when the fed may have to raise rates to combat inflation?

Theyre crashing the market to monetize the debt at cheaper rates

shuckles 2y ago

This is the dumbest theory I’ve heard so far.

amazingamazing 2y ago

go look at trump interviews in the 80s and 90s. the guy has always loved tariffs.

ldjkfkdsjnv 2y ago
yes but this is a dual objective move

triceratops 2y ago

But why?

ldjkfkdsjnv 2y ago
because the country cant manage the debt, and us equity growth is partly due to rampant government spending, not true growth
- triceratops 2y ago
  > us equity growth is partly due to rampant government spending The US government bought a lot of equities? If yes, isn't crashing the stock market bad for the government? If no, then what does that mean, exactly? The government spends a lot of money buying stuff from companies in the S&P 500? Enough to send their prices sky high? How does crashing the stock market fix that?
  - ldjkfkdsjnv 2y ago
    its too complicated to explain, and i am completely shook by these losses. but there is a growing theory that there is a relationship between government debt/spending and asset prices. the last few years, up to 25% of total USA employment is indirectly from the government. the last 25 years has been a hallowing out of actual economy, replaced with debt, financial engineering, low interest rates, and the like. the growth is mostly fake, which is the why the middle class is almost gone and no one can afford anything
    - theGnuMe 2y ago
      prove it.
      - ldjkfkdsjnv 2y ago
        trump is trying to fix it by onshoring manufacturing, im not supporting that solution, but thats whats going on
    - apothegm 2y ago
      I agree with you on the plague of financialization. Just not that it’s driven by government debt. My take is that it’s caused by growing inequality and trickle-up redistribution of money from those who don’t have enough to spend to those who already have too much and thus will save/invest rather than spending.
      - fuzzfactor 2y ago
        This is serious. You're both right. In the type of consumer economy I saw "recover" after the Nixon Recession did its permanent damage, it became possible for the Feds to juice the economy more than ever (after stability was finally achieved), by adjusting interest rates and increasing spending in the right areas it would be amplified and they effectively gained more and more control of overall prosperity, more than any other one entity. This couldn't have happened earlier until the wealth held by the government was beyond a certain ratio to that held by the combined population. In simplest terms disregarding important things like liquidity or absolute net worth. It wouldn't have been so bad except people got a lot poorer and vast opportunities were lost forever in a few short years. Government money had a much stronger seeding effect after that which was then relied on heavily ever since, but gradually squeezing the whole time. Biden unleashed a bit of this and it still worked to some degree, just not enough people ended up feeling more prosperous before it was too late. Really helps the economy most if the ultimate beneficiaries are ordinary working people and are widely dispersed, but a lot of it does not come back to the Treasury and builds up as debt. In a less-stable environment, increased government spending is less likely to hit its intended target, plus a great abundance of consumers have been tapped out and don't have the resources to amplify it and collectively bail out anything this time, which was the leverage that worked in the past.
- comrade1234 2y ago
  It’ll save about $300B over ten years vs wiping out $6T in stock valuation in a month.
- joegibbs 2y ago
  Aren't there better ways to manage the debt than crashing trade? Print a ton of money and deliberately cause inflation, that wouldn't be as harsh as tariffs. Print the money and use it to buy foreign currency, that would weaken the dollar.
  - zozbot234 2y ago
    The better way is what Clinton did throughout his terms as President - cut government waste and run budget surpluses. It doesn't have to hurt if you do it gradually enough. Some commentators will argue that the U.S. enjoys some sort of unique exceptionalism due to the dollar being a "reserve currency" and whatnot, such that they should not attempt to do this. These commentators are wrong.
    - roflyear 2y ago
      I think people will tend to argue two points: 1) Debt isn't bad in itself, running a deficit isn't bad in itself. (though they can be bad in some situations!) 2) The US is in the position to "fix" the debt problem in a lot of creative ways (I mean, some pro-tariff are arguing this too, right? just that the creative way is tariffs).

UncleMeat 2y ago

Hard to motivate rates dropping by introducing high inflation. Will Trump also illegally take command of the fed board too?

roflyear 2y ago

Can you explain how this will work when the fed may have to raise rates to combat inflation?