Quote Originally Posted by palmerq View Post
You have to be a bit suspicious of the geezers that want to make it more difficult to vote, hopefully this American nonsense stays down there....


Some big joe stuff

He did a speech today, was actually a pretty good one but jimeny Christmas the old git really needs to control his voice volume, I was listening at work and wearing earbuds and the git nearly deafened me at times with the volume changes. I was not aware of this tulsa stuff will have to look into it.

https://www.bbc.com/news/world-us-canada-57323200


Bidens guys defending some trump oil projects

https://www.nytimes.com/2021/05/26/c...-drilling.html

The he cancels some, I guess you have to balance it out
https://www.cbc.ca/news/canada/north...anwr-1.6049081


Bidens budget


https://www.bbc.co.uk/news/world-us-canada-57285970

Now national debt at the current time is obea major concern (:S), deficits are very bad....
("Former President Donald Trump, a Republican, also ran up the deficit each year he was in office, and his final annual spending proposal had a price tag of $4.8tn.") at certain times... I'm a self admitted dummy but I see quite a few well educated people claim that national debt really isn't as bad as it sounds, so why is that? For normal folks that seems like a really big thing, I'd guess that government bonds(my robo advisor on the rrsp seems to buy the etf form, he better be right or he's off to recycling) are pretty safe places for people to store money and there's a lot of money around? I don't know... My ears still hurt from Joe's shouting.

I'm trying and failing to find a debt clock that'll post here. You know what I mean. The clock ticking upwards with huge amounts of debt added every minute. Just imagine it.

https://www.worldometers.info/us-debt-clock/

There.

Now then, that debt doesn't matter at all. It's just a number. It means nothing by itself.

If you have a million dollars of debt and your income is ten thousand dollars you're fucked. You don't make enough money to ever be able to repay your bills. You're insolvent.

If you have a million dollars of debt and your income is ten million dollars the debt is less of a problem. You can pay off your debt and still have enough money left over to get the groceries in.

So it isn't the debt number that means anything, it's the amount of debt you have in relation to your income.

In sovereign/government/national debt scenarios the level of income is the GDP number, the total dollar/euro/loonie etc size of the economy. So how much a country owes isn't the issue, it's how much a country owes in relation to its income. The fancy term for this relationship is debt to GDP ratio.

Governments raise money to finance their deficits by borrowing from people with surplus cash. They do this by issuing and auctioning bonds every month. The amount of interest the government has to pay on these bonds depends on how much money is available for them to borrow and how much of a credit risk people with surplus cash think the government is. If there's a ton of surplus cash out there and very few promising investment opportunities then cashholders will be keen to lend at lower rates. If there isn't much cash out there and/or lots of different promising investment opportunities in other things (stocks, startups etc) then governments will have to offer higher rates of interest to attract enough cash to finance their deficits. Supply and demand*.

The last forty years have seen a huge redistribution of wealth up the income scale. The people at the top have a huge amount of surplus cash with few good investment opportunities due to the rest of the population not having much money to spend on new goods and services due to the people at the top hoovering all the cash up. So these cashholders are happy to lend it to governments at low rates of interest. There is such a gigantic ocean of money sitting in the hands of a handful of people that they'll even lend it to governments for free or pay a small fee in the form of less interest than inflation just to park their cash somewhere.

Let me explain.

Here is the rate governments have to pay to borrow money for a set number of years:

https://www.treasury.gov/resource-ce...spx?data=yield

Now here are the same number taking into account future inflation.

https://www.treasury.gov/resource-ce...data=realyield

When you subtract inflation away from the nominal rate, the actual rate of interest governments pay, people are paying governments 0.05% interest a year to look after their cash for them. An example. If the government borrows a hundred dollars from you on January first this year and agrees to pay you one percent interest. Inflation runs at two percent over the year so government revenues increase by two percent without the government doing anything due to inflation. They then pay you a hundred and one dollars leaving them a dollar up and you a dollar down in real terms over the year but you're a dollar up in nominal terms.


Another thing to consider. If you go to buy a house a bank will probably lend a borrower three plus times your income to buy one. Over the thirty or so years they pay that loan back anything could happen to them. They could become unable to work for some reason, whatever, and the loan becomes bad. Even so banks make lots of loans and the vast majority will pay off so they can offer loans at a low level of interest. Government showever will always be there. They don't have a retirement date, they go on forever and they have increasing millions of taxpayers paying tax revenues and increasing in size economies. Both of these things basically double over twenty years. So governments are a super safe bet for investors. US national debt is the safest investment on the planet.

Right now the US owes a hundred and something percent of its income. But a bank will lend some fucker three hundred percent of your income. The US all things considered is a much safer bet than some random fucker eh? They're there forever. I'll add more to this tomorrow, got to go.