07-29-2011, 07:27 AM
|
|
|
Ah My Balls
Industry Role:
Join Date: Feb 2007
Location: Under the gold leaf ICQ 388-454-421
Posts: 14,311
|
Quote:
Originally Posted by dyna mo
if you can't see it, i can't explain it. besides, i asked you first to explain to me how ron paul knows and understands the consequences of a default, i never heard back from you.
and that video isn't an op-ed piece, it's an interview of ron paul where he STATES verbatim that there is no need to default.
/
|
How does he know what will happen if we defaulted? Because he was alive and remembers what happened last time? But I dont know, how he knows. Maybe he knows something about our history.
http://blogs.wsj.com/marketbeat/2011...-we-defaulted/
Quote:
As a result, t-bill rates jumped 60 basis points, an increase that didn?t go away once the government came to its senses and cured the default, wrote Terry Zivney and Richard Marcus back in 1985. ?The default apparently warned investors that Treasury issues were not completely riskless, which translates into a $12 billion annual increase in federal interest payments as a result of the 60 basis point permanent increase in interest rates,? they wrote.
So the default permanently affected US short-term borrowing. But it had no discernible effect on long-term borrowing. Ten-year Treasury yields were about the same at the end of May as they were at the start of April 1979.
The dollar fell a teensy bit after the 1979 default, but soon turned higher, notes forex analyst Kathy Lien. It tumbled toward the end of the year, but the default probably had nothing to do with it.
As with a rating-agency downgrade, a brief technical default is probably not nearly as important for interest rates or the dollar as is the outlook for inflation, which in 1979 was very dire indeed.
Just to close the books on 1979, as it turned out, the country was not in permanent decline, and disco?s stranglehold brought us punk. Silver linings, people!
|
__________________
|
|
|