1931 begehen
By Ambrose Evans-Pritchard
wohlweislich im Blog ,wenn er schon so ausrastet,dass er meint man müsse zum Mars fliehen,wenn man sich nicht einigt,beide Parteien seien schuld und die Diskussion über das AAA-Rating sei nur ne Ablenkung,entscheidend sei,dass die Steuereinnehmen nur 60% des FED-Budgets abdecken,der Squeeze wäre so gross,dass die US-Economy innerhalb weniger Monate in eine Abwärtsspirale geriete,die die Welt mit sich nehmen würde.
,,,However, the 14th Amendment still binds the nation. The US cannot miss a coupon payment on past debt without breaching the nation’s highest law, and without defiling the honour of the United States.
So this shifts the balance of probabilities a little further towards a brutal fiscal shock as spending is cut to meet the debt ceiling, if Congressional leaders fail to marshal their troops in any semblance of order over coming days.
Since tax revenues cover just 60pc of the federal budget, the squeeze would have to be on a scale large enough within a few months to tip the US economy into a downward spiral and take the world with it.As an historic policy error it would match the New York Fed’s decision to raise interest rates twice in one week in October 1931, but at least the Fed had an excuse. (The Banque de France had withdrawn gold reserves from the US)....
I leave it to American readers to debate who would come out of this in worst shape. I adamantly refuse to take sides in this dispute. Both parties have brought America to this unhappy pass over the last 50 years. A plague on both their houses.
Should America embark on such fiscal contraction at a time when economic growth has already slipped to stall speed, and debt deleveraging continues with a vengeance, I would like to flee to Mars for safety.
...Should America instead opt to evade these fiscal cuts by actually defaulting on debts accumulated by self-indulgent baby boomers, I would also like to flee Mars because such an outcome might be even worse.
Those who choose to breach America’s sacred bond to creditors across the world in this squalid way, in circumstances short of war or extenuating distress, deserve our contempt. Be they accursed forever if they stoop so low.
As for America’s loss of its AAA rating, a number of readers strongly disagree with my view that this would be a one-day drama, arguing that great numbers bondholders would be forced to sell their debt under investment rules.
I do not find that sort of mechanical argument to be convincing. You can change those sorts of rules in a heartbeat, just as the ECB tweaked its collateral rules for Greece when it needed to, or Japan softened regulations after its downgrades.
The AAA debate is a distraction.
blogs.telegraph.co.uk/finance/...mmits-worst-error-since-1931/
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