https://www.voanews.com/a/us-treasury-to-launch-measures-tue...
[1] https://en.m.wikipedia.org/wiki/History_of_the_United_States...
"Musk said in social media posts over the weekend that his “DOGE team” of enforcers is shutting down some payments, claiming that “corruption and waste is being rooted out in real-time.”
If the Musk team veered into legally legitimate transfers, that could spark debate over whether the federal government is following through on its obligations. Former Treasury Secretary Janet Yellen said repeatedly — during debt-limit standoffs — that even prioritizing some payments ahead of others amounted to “default by another name.” Trump’s first Treasury chief, Steven Mnuchin, said in 2017 that “the government should honor all of its obligations."
https://finance.yahoo.com/news/musk-moves-treasury-risk-deba...
After it happens, everyone will say it was obvious all along, if only you could have connected the dots.
Dots such as famously bragging about defaulting on personal and business debts, big promises about radical reductions in debt levels with zero public plan for how it's supposed to happen, eagerness to renege on long standing treaty commitments, withdrawal from international organizations, threats of economic warfare against allies and adversaries alike, immediate seizure of the Treasury systems that execute payments for bond interest and principal, a stated desire to dramatically devalue the dollar, etc.
Usually gold just sits in underground vaults and changes in ownership are recorded in a ledger.
When massive quantities of physical gold are put on airplanes, something unusual is happening.
By definition people with low credibility have to fight an uphill battle to get their claims accepted.
it could be related to his common tactic of creating strategic uncertainty, but this one was oddly specific. most heads of state refrain from commenting on default risk as the 'bond vigilantes' who lend their treasury money by buying their bonds are essential to their ability to fund government and govern.
the risk of course is that there are trillions in derivatives stacked on top of any so-called "illigitimate" debt, which creates a kind of mexican stand-off where defaulting on those bonds causes systemic liquidity problems elsewhere in the system that will require policy intervention to recover from it, hence it is never a priority to touch it. That's a sci-fi interpretation, and any actual practitioner in finance (I am not one) might call that irresponsible speculation so ymmv.
but still, maybe it's a political play. a certain set of asset managers is orchestrating political problems around the world and the only way to dislodge them is to do something unthinkable. Even if he doesn't, how big are you willing to bet he won't? That hesitation is the essence of this president's strategy. Very interesting times.
[1] https://www.reuters.com/markets/rates-bonds/bond-traders-wav...
You are mis-interpreting this. Based on your interpretation, a government can never cut any spending to not be considered in default.
I think what Yellen meant is that you should pay all your obligations for services rendered and that you actually want to be rendered. This is not what DOGE proposing (and in no way I support that insanity) and the difference is quite clear.
My guess is it's not that different. But I've been wrong every time I tried to predict the US on this leadership...
Defaulting on the debt has no upside for them now, so probably won't happen.
The GOP don't have a majority that support either the budget or extending the debt ceiling. Dems should let them stew and make various demands in exchange for their vote, as the GOP has done to them.
Reconciliation is a Senate parliamentary procedure [1]. Thune could just (a) fire parliamentarians until one agrees with Trump or (b) revise the rules with a party-line vote.
[1] https://en.wikipedia.org/wiki/Reconciliation_(United_States_...
Literally the last time these clowns were in power [1].
[1] https://en.wikipedia.org/wiki/2018%E2%80%932019_United_State...
I agree that default is a remote possibility. But the reason isn't Congressional Republicans will avoid shooting themselves in the foot.
At that time, when those formerly known as rebpulicans are angry about being misrepresented, are you going to tell them that they're not real republicans because they voted for a narcissist who was flattered into turning the wheel over to people with contradictory goals, and now "republican" means something that they have no control over? That's absurd. A party is a party insofar as it represents the will of its constituents, coups not withstanding.
Like picking Trump? It seems like the president is the biggest risk of overturning the board for no logical reason
Everyone said that about the UK Conservatives until the Liz Truss budget. https://en.wikipedia.org/wiki/September_2022_United_Kingdom_...
Fortunately the UK has extremely efficient systems for removing people who fuck up the money. She was the shortest serving PM and removed on her fiftieth day in office. The US is stuck with its current government until at least the midterms.
Based on the current MO at the Treasury, it would seem that--possibly to the greatest degree in generations--whether Treasuries keep paying is almost entirely unlinked from what the Congress does.
However, unrestricted fiscal deficits and debt could lead to a reversal of the low positions of the US dollar and gold, shifting from "the US dollar pricing gold" to "gold pricing the US dollar."
When they talked about upending the current order, the banking system and debt in general being sacrosanct are pretty foundational to said order
Governments do not actually borrow from anyone if they can create their own money. They provide a facility for the rich to park some of their immense wealth but that is not where the money comes from, those individuals accumulate they do not create money.
I understand how nation states who print their own currency have a different set of rules than any agent working with currency that they do not control the monetary supply of.
None of that changes the fact that they can _choose_ to default
Nothing has happened YET.
It has not yet happened because of the presence of at least a minimum of responsible players who both understand the consequences and care about the consequences (at least more than their particular political goals).
But there is no structure that prevents it from happening, no part of the machine that prevents a mistake.
There are also forces pushing it to happen.
The past performance of your advice is no guarantee of future performance, and it is particularly bad today.
I sincerely hope you turn out to be right, but if so, it will only be by chance.