I just had to check behind me, lol. Lots of pro, savy traders in here; even more with unhealthy perspectives on life and people. Perhaps it's the combination of sitting alone too long and struggling to strike it rich that leads to such bitterness? Perspective is key. Spending time with people of all walks of life from many different cultures; willing to watch and listen. So much to learn. I'm a new trader, something I discovered I really enjoy and will do for a long time now that I'm retired. I'm quiet on many subjects and share my experience on a few. I can also appreciate knowledgeable traders and dislike their politics all at the same time.
I did not know that. I know the ECB was charging Banks a fee to hold excess reserves, hence negative interest, but I had always assumed retail loan rates had remained non-zero and positive -- there is really no other option unless loans are State subsidized. This zero mortgage rate business seems like a very progressive policy. If we adopted such a policy in the U.S. we no doubt would farm it out to for profit corporations who would find a way to loan the peoples money at zero interest to collect fees for making loans to those who had no possibility of making the first payment.
Yes, these are government subsidized loans to first time buyers with whatever bank fees paid to banks by the government. If I remember correctly, this scheme was extended to anyone buying a primary residence. It's a good way to stimulate the economy, with household buying furniture, repairs, etc..
This seems like the 2005-2008 US real estate problem just in slow motion. Who's holding all the mortgages? How can everyone be a home owner? That sounds like a disaster waiting to happen especially when a hard recession hits -- which may be coming soon.
In France this has been going on for well over a decade. It might have changed recently now that inflation is so high.
%% OK; + that's stretch to call coin ''print'' even though they do. And the Headline ''Some Has to Pay for Student Loan Forgiveness'' Not really; SCOTUS can easy smack down that nonsense. EVEN NPR did a news deal on Perdue U, priced under $10,000+ has been past 10 years. Or if Headline is right, after NOV elections ; the IRS agents[armed] may rule as they have in past /debt forgiveness = income + the borrower[slave to lender] now owes tax on it.
Congress makes the rules. The IRS enforces them to the best of their ability -- are we asking too much of the IRS considering the tax code we are asking them to enforce is 72,000 pages long? If Congress does not want forgiven student loans to be treated as income, after all much did not end in the students' hands but in the hands of some educational institution, Congress will instruct the IRS on how they would like the forgiven portion of loans to be treated. "Printing", should, in my opinion, just refer to the spending of newly created money into the private sector economy. In that sense, only the Congress has the constitutional power to "print"new money. The Treasury accommodates the Congress in "printing" whenever it spends in deficit according to Congress's will. The Central Bank accommodates the Congress when it covers net Treasury overdrafts. So I suppose it isn't entirely wrong to say that the Treasury or the Central bank "print." It is certainly misleading, however, because neither the Treasury nor the Central Bank has any say whatsoever over how much shall be printed... In my opinion, it is also misleading to call QE "printing," even though it's commonly done -- even Central Bankers have on occasion referred to QE as printing!. QE increases bank reserve accounts in exchange for bonds. Bonds move to the governments side of the ledger, and Bank reserves are increased accordingly on the private sector side. (It is critical that one recognize that both Treasury bonds and Bank Reserves are forms of money and they are interchangeable!*) The idea behind QE is to increase bank reserves and accordingly force down both wholesale and retail lending rates. If there is sufficient demand for new loans, an increase in the private sector money supply, via fractional reserve banking, should result. In reality, the controlling step tends to be demand. In a recession, unfortunately, small incremental decreases in interest rates tend to be quite ineffective in getting a private sector in the process of paying down debt to reverse course and begin to borrow more! Without additional borrowing their is no increase in the money supply. Would we say then that it is the borrowers who are "printing"? I hardly think so. The bottom line is that the real power to affect the private sector money supply rests with Congress and the fiscal measures it can take, if so inclined. Only Congress can actually "Print." That's what the framers of the Constitution intended, and that's the way it is. It would be nice, however, if Congress would actually function as intended. Sadly, the Framers failed to anticipate that Senators would one day simply thumb their noses at the Constitution and adopt rules that would allow any one Senator to inactivate the Senate and thereby make fulfilling some of its Constitutionally required duties impossible. _______________________ *Treasury Bonds, Bank Reserves, Bank Notes and Coin are all inter-convertible forms of U.S. Money. All bear only one risk, that of inflation! This risk is somewhat muted in the case of Treasury bonds in that they are an interest paying form of money, thus for longer term storage of money, the bond form is preferred.
%% OK; but when IRS does an audit/ the goal is to collect more money, SOP= standard operating procedure. Actually while i don't borrow for education, nor did my parents; i consider college debt forgiveness as income[gain as education service] .Dont know if the IRS looks @ it that way , but again any IRS audit goal is to collect more money. Sure hope you are right on T bonds.. ''only one risk = inflation '' ; when S&P did a downgrade of US debt some years ago \they may have differed a bit, on only one risk=inflation. Thanks.
S&P was categorically wrong in doing that. And that's why the downgrade, which was not only poorly reasoned but also silly, had no effect once the smoke cleared. Even Congress can not force the Treasury to default on bonds without violating the Constitution. They just pretend during the annual charade. The U.S. has no real debt even though it issues debt instruments. It certainly has no debt denominated in another countries currency. The U.S. does issue debt instruments, but for purposes other than borrowing. Nevertheless, the U.S. must do what all sovereign countries must do; it must keep its aggregate spending in line with its aggregate productivity over time. (The revolting British colonies in North America borrowed from the French Crown, but currently the U.S. has no real debt.) No Country that issues debt instruments denominated only in its own fiat currency will default. By the time the U.S. Treasury auctions Securities, the money to cover the principle has already been "printed" and spent into the economy. The interest on securities is treated as non-discretionary spending and is either covered by tax revenue or by new "printing", i,e,, deficit spending. The only way the U.S. could acquire real debt on which it could default is if the U.S. were forced to borrow using debt instruments denominated in another nations currency. This is not likely to happen anytime soon. Russia defaulted, but not on bonds denominated in Rubles. Inflation is the only current risk for the U.S., but down the road servicing the securities it has issued could present a problem for the U.S. should interest payments become too large a fraction of the non-discretionary budget. That situation would translate into some combination of accelerated inflation and lowered living standards.