Mayor Bloomberg: America's Credit Line is Infinite

[AuH20]

I beg to disagree. At some point, as a foreign lender you cut your losses.

http://politicker.com/2013/03/mayor-bloomberg-dont-panic-about-the-sequester/


Furthermore, while saying the federal deficit does indeed need to be curtailed, Mr. Bloomberg argued the United States could owe “an infinite amount of money” and there is no specific amount that would cause the country to default.

“We are spending money we don’t have,” Mr. Bloomberg explained. “It’s not like your household. In your household, people are saying, ‘Oh, you can’t spend money you don’t have.’ That is true for your household because nobody is going to lend you an infinite amount of money. When it comes to the United States federal government, people do seem willing to lend us an infinite amount of money. … Our debt is so big and so many people own it that it’s preposterous to think that they would stop selling us more. It’s the old story: If you owe the bank $50,000, you got a problem. If you owe the bank $50 million, they got a problem. And that’s a problem for the lenders. They can’t stop lending us more money.”

[coastie]

If you owe the bank $50,000, you got a problem. If you owe the bank $50 million, they got a problem. And that’s a problem for the lenders. They can’t stop lending us more money.”

Must be an old billionaire's joke, I've never heard it.

[A Son of Liberty]

LOL A lot of people are going to be in for a BIG surprise.

[belian78]

8 years, 8 years I've been looking at the world and this country with truly open eyes, and still to this day I read or watch something that makes me say 'oh my god, how delusional can people get!?'.

[AuH20]

LOL A lot of people are going to be in for a BIG surprise.

Certain factions are only going to be exploited for so long. Right, now refugees are fleeing from the dying Euro to the dollar and dollar denominated assets & financial instruments. Not too far off, these very same entities will leave the U.S. market as well, leaving gentlemen like Michael Bloomberg in a suicidal rage.

[jclay2]

8 years, 8 years I've been looking at the world and this country with truly open eyes, and still to this day I read or watch something that makes me say 'oh my god, how delusional can people get!?'.

Same here, but I think this case is different. Bloomberg is not stupid. He knows how this will end and only cares about gaining power for himself. He could lose 90% of his wealth and still be worth 2.5 billion dollars. He does not care about money or the future of the country. The only thing that matters to bloomberg is that the government continues to take over and control every aspect of our lives. He already has all the money in the world, playing risk with human beings as your pawns, is all this pond scum has left.

[buck000]

This is great news. Let's go ahead and borrow a quadrillion dollars from the Fed and hand it out. We'll all be rich, Rich, RICH, I say!

;)

[Lucille]

Must be an old billionaire's joke, I've never heard it.

I heard it first in Rosalie Goes Shopping (http://www.encyclopediaofarkansas.net/encyclopedia/entry-detail.aspx?entryID=2182).


Filmed at the end of the “Me Decade” of the 1980s, Rosalie Goes Shopping (1989) is an eccentric, comical critique of American consumerism. In its quirky fashion, the film reflects the growing multinational, digitized nature of debtor economics and underscores the reality that consumerism is not limited to those living in large cities. [...]

The family lives in a large new house with a swimming pool and a satellite dish. Raised in the most extreme of consumerist environments, Rosalie’s children, like her, are restless and utterly dependent on consumer products. The family eats extravagant meals prepared by son Schnucki, who is studying to be a gourmet chef. After dinner, the family sits on the living room couch watching videotaped television commercials, parts of which they have memorized and chant in unison. They pause only to order garish products, such as ring watches, over the phone.

Rosalie’s “shopping” habit is fueled predominantly by loans and mortgages, thirty-seven credit cards, installment plans, and, as the movie unfolds, forged checks and money stolen from Riceland and Metropolitan National Bank in Little Rock, among others. A Catholic, Rosalie regularly confesses to her baffled, disapproving local priest (played by Judge Reinhold), who remains the only outsider significantly aware of Rosalie’s credit swindling. Later, the priest (reminded by Rosalie that the Vatican is itself loaded with debt) begins to rationalize Rosalie’s methods of obtaining money.

Increasingly unable to pay off her debts, Rosalie, with the aid of daughter April’s computer, founds a “family business”—composed, in essence, of hacking into businesses’ databases—by which she is able to “beat the system.” The film’s most famous line is spoken by Rosalie’s mailman (played by Bill Butler): “If you’re $100,000 in debt, that’s your problem, but if you’re a million in debt, it’s the bank’s.” Like many large corporations, Rosalie thrives because of—not despite—her extreme debt, and over the closing credits, she reveals to the priest that she has decided to take her “business” multinational.

Good flick!

[jbauer]

This is great news. Let's go ahead and borrow a quadrillion dollars from the Fed and hand it out. We'll all be rich, Rich, RICH, I say!

;)

You know there was someone over in France that said something pretty similar not all that long ago: "Let them eat Cake". Maybe there will be a similar outcome for Mr Bloomberg

[brandon]

"If you owe the bank $50,000, you got a problem. If you owe the bank $50 million, they got a problem."


I would think if you owe the bank $50 million both parties have a problem and the outcome isn't going to be good for either one.

[KingNothing]

If governments around the world consider certain corporations too big to fail, why do you think governments around the world consider the most significant country on earth Small Enough to Fail?

America will not be allowed to fail, because if we did, China, Japan, all of Europe, and a litany of other countries would fail. The worst case scenario is not a total collapse. The worst case scenario is the Greek Scenario. One "solution" after another, as the standard of living slowly declines over a decade or two.

[The Goat]

like a bank can't get a 50million bailout.

[seraphson]

Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist. - Kenneth Boulding

[Brian4Liberty]

Must be an old billionaire's joke, I've never heard it.

Probably a saying among swindlers, conmen, fraudsters, and Ponzi schemers.

[TonySutton]

We are already seeing trade agreements between countries where they are no longer using the US Dollar. These countries know they have a problem and they are putting steps in place to fix their end of it. Unfortunately our government is not.

[A Son of Liberty]

If governments around the world consider certain corporations too big to fail, why do you think governments around the world consider the most significant country on earth Small Enough to Fail?

America will not be allowed to fail, because if we did, China, Japan, all of Europe, and a litany of other countries would fail. The worst case scenario is not a total collapse. The worst case scenario is the Greek Scenario. One "solution" after another, as the standard of living slowly declines over a decade or two.

I get what you're saying, but you're also assuming that "they" have the power to control it.

Don't you think that the Politburo had no intention of allowing the Soviet Union to crumble so dramatically as it did?

[AuH20]

We are already seeing trade agreements between countries where they are no longer using the US Dollar. These countries know they have a problem and they are putting steps in place to fix their end of it. Unfortunately our government is not.

Correct. The BRICS have a contingency plan in place for life after America.

[A Son of Liberty]

We are already seeing trade agreements between countries where they are no longer using the US Dollar. These countries know they have a problem and they are putting steps in place to fix their end of it. Unfortunately our government is not.

Our government is actually doubling down on the present paradigm.

[Lucille]

Jim Garrow was interviewed by Dave Janda (http://www.davejanda.com/operation_freedom/) and at the end they talked about China and debt (19:40):


"They're waiting for the promise that Obama made to them to come to fruition. They are continuing to lend, Obama has a ceiling, he knows the number where he has to stop spending...they've told him what they want in payment of it, and what they want are the natural resources of America. They want coal, they want natural gas, they want oil. And they also want access to the farmland-the breadbasket that we have-these things have been promised and that's what they're waiting for. The big stick in the mud, and I think you know full well what it is, they do not want to have to face an angry American armed population, because they know they'll lose. And so the litmus test goes into effect. The sell-out is America in total to the lender of this money, and that's to China. So China's sitting there in a wonderful position, knowing full well they'll be able to pull the plug at some point in time, and the UN, the World Bank will move in to do a settlement of the debt and the apportionment of the natural resources. In 2011 we had two groups come in, the Bank of China and the Industrial and Commercial Bank of China, and they valued coal, oil, nat. gas-they put a number to it-so the govt of China knows full well how much value they can get and how much money that they will loan to America knowing full well it will be covered by natural resources. They are building, even as we speak, special economic zones-at the invitation of Mr. Obama, he has invited them into the country-they are setting up and not looking to leave."

http://www.davejanda.com/audio/JimGarrow022413.mp3

Soon they'll just be protecting their interests.


http://www.youtube.com/watch?v=XKfuS6gfxPY

Does China Plan To Establish “China Cities” And “Special Economic Zones” All Over America?
http://www.infowars.com/does-china-plan-to-establish-china-cities-and-special-economic-zones-all-over-america/

[TheTexan]

As long as we keep spending more on our military than the next 10 largest countries combined, our credit line is infinite because we say so. Or else.

[AuH20]

As long as we keep spending more on our military than the next 10 largest countries combined, our credit line is infinite because we say so. Or else.

But we are going to fight the world? The bully's days are over for that reason.

[TheTexan]

But we are going to fight the world? The bully's days are over for that reason.

It's one of the few ways I can see for the United States to extend it's reign as the World's #1 Superpower.

As long as our dollar has reserve currency status, we can spend and do what we want. Banks dumping the dollar as a reserve currency is a problem that military force can certainly fix...

[AuH20]

It's one of the few ways I can see for the United States to extend it's reign as the World's #1 Superpower.

As long as our dollar has reserve currency status, we can spend and do what we want. Banks dumping the dollar as a reserve currency is a problem that military force can certainly fix...

On a case by case scale, possibly. Not in a flash crash scenario which results in a mass exodus.

[acptulsa]

"If you owe the bank $50,000, you got a problem. If you owe the bank $50 million, they got a problem."

I would think if you owe the bank $50 million both parties have a problem and the outcome isn't going to be good for either one.


Probably a saying among swindlers, conmen, fraudsters, and Ponzi schemers.


As long as we keep spending more on our military than the next 10 largest countries combined, our credit line is infinite because we say so. Or else.

I don't think everyone understands the jist of this.


They can’t stop lending us more money.

The reason behind the joke is that if a corporation is that deeply indebted to you you really, really, really want that corporation to survive long enough to recover and become solvent. If it doesn't, you're screwed. If it declares bankruptcy, you might have to do the same. So, if you can't afford for them to default, and if they will default if you don't loan them more money because they're in another 'situation', you loan them more money. It might be throwing good money after bad. But you have to gamble that it isn't.

Bloomberg's fallacy is that the government of a sovereign nation is a corporation, or even like a corporation. Well, that's one of his fallacies; another is that he and 'we' are spending that money. In fact, the government is spending that money. But that's beside my point. The fact is, if the government defaults the nation remains. A corporation is liable to be carved up, and its assets sold. But a nation remains. And if it remains, there's still a chance for its creditors to recover something.

Yes, it behooves a person or entity that holds a bunch of our paper to encourage us to avoid defaulting. Defaulting on bonds would set a precedent that bondholders would obviously much prefer to avoid. But even a corporation that shows no promise of ever achieving solvency--let's take the hypothetical case of a typewriter manufacturer which simply refuses to get into the business of making computer peripherals, and refuses to diversify in any way--the creditor will stop lending, and stop throwing good money after bad, sooner or later. This is the bottom line. And it's even more likely in the case of the government, because a corporation can cease to exist, while a nation basically cannot.

People have to keep lending to us, Mr. Mayor? Don't bet the bank on it.

[TheTexan]

Yes, it behooves a person or entity that holds a bunch of our paper to encourage us to avoid defaulting. Defaulting on bonds would set a precedent that bondholders would obviously much prefer to avoid. But even a corporation that shows no promise of ever achieving solvency--let's take the hypothetical case of a typewriter manufacturer which simply refuses to get into the business of making computer peripherals, and refuses to diversify in any way--the creditor will stop lending, and stop throwing good money after bad, sooner or later. This is the bottom line. And it's even more likely in the case of the government, because a corporation can cease to exist, while a nation basically cannot.

People have to keep lending to us, Mr. Mayor? Don't bet the bank on it.

That, and there's a large incentive to be the first nation to dump US bonds. It's game theory.

If noone dumps the dollar, all the bankers win a little.
If you dump the dollar first, you win a lot.
If someone else dumps the dollar first, you lose everything.

[Michigan11]

I think all of these central banks are really one and working as one. They effectively will transition all of these in to one.

[acptulsa]

That, and there's a large incentive to be the first nation to dump US bonds. It's game theory.

If noone dumps the dollar, all the bankers win a little.
If you dump the dollar first, you win a lot.
If someone else dumps the dollar first, you lose everything.

Well, arguably if no one dumps the dollar, the bankers--Specifcally those big banks behind the Fed--stand to win a lot. And if you aren't shorting the dollar somehow, and do hold bonds, being the first to dump the dollar doesn't actually win you anything at all. What it does do is it ensures that you recover something from your investment, and it doesn't all go up in smoke.

The game here is, if you think the debt will be paid off sooner or later, you don't rock the boat. The moment you become convinced that it can't be paid off, however, you really want to be the first to get the @#$& out. And I'm convinced that's where the nation stands today. I doubt there's a bondholder anywhere in the nation that isn't watching other bondholders for that first sign of panic.


I think all of these central banks are really one and working as one. They effectively will transition all of these in to one.

Yes, I think that's the end game as well. They don't mind their FRN failing, provided they come out of it still the only Officially Approved Counterfeiter. We are the ones vocally trying to educate people so they can see that it would be a major mistake to reward the same counterfeiters for their failure by allowing them to remain the Sole Official Counterfeiters. We are the thorn in their side.

Good job, Us. I wonder if we can keep the little bondholders from getting thrown over the barrel and screwed without so much as a kiss.

[TheTexan]

Well, arguably if no one dumps the dollar, the bankers--Specifcally those big banks behind the Fed--stand to win a lot.

In the long term, yes. Dumping the dollar is a big short term gain, whereas holding the dollar is a big long term gain.

The thing is though, holding bonds gets less and less profitable over time, whereas dumping bonds gets more and more profitable over time.

For example, in order to prop up the banking system, the bankers are storing close to 2 trillion in excess reserves. They are getting paid .25% and the "official" interest rate is 2%. They are losing money from that arrangement.

Eventually the big payout from a short term gain will be worth more than the long term gains from holding.


And if you aren't shorting the dollar somehow, and do hold bonds, being the first to dump the dollar doesn't actually win you anything at all. What it does do is it ensures that you recover something from your investment, and it doesn't all go up in smoke.

I disagree. The dollar is over valued. Meaning, that if you sell the worthless paper to purchase useful assets, you immediately have realized increased value.

The dollar then crashes, and your relative standing compared to the countries who lost their worthless paper, makes it clear that the country who dumped the dollar did in fact gain something.

[jkr]

http://i1-games.softpedia-static.com/screenshots/Warzone-2100-Mod-Unlimited-Power_1.gif#Unlimited%20power%20320x246

[Anti Federalist]

Same here, but I think this case is different. Bloomberg is not stupid. He knows how this will end and only cares about gaining power for himself. He could lose 90% of his wealth and still be worth 2.5 billion dollars. He does not care about money or the future of the country. The only thing that matters to bloomberg is that the government continues to take over and control every aspect of our lives. He already has all the money in the world, playing Risk, with human beings as your pawns, is all this pond scum has left.

This is correct.