It is sustainable provided the dollar remains the world's reserve currency. Eventually, however, the rest of the world may tire of funding our largess, and switch to another reserve. Watch the transactions through SWIFT and see the percentage of transactions in dollars. Also, watch the percentage of foreign exchange reserves held in U.S. dollars. When those percentages begin to slip, it is a leading indicator of imminent devaluation of the dollar.

Eventually, any fiat currency will return to its intrinsic value. Much like going bankrupt, it will happen slowly, and then very quickly. Oh, for a functioning crystal ball...

quote:

Originally posted by hudr:
...I am near debt free. I am still invested in “the game”, but we will just have to see how that shakes out.

The following is not a criticism. I quote your post only as a basis for discussion. In fact, I admire anybody's desire to be debt free, in particular for the psychological benefits it provides. Having said that...

If interest rates are at an all-time low, and there is a threat of increasing inflation due to deficit spending, what is the strategy to being debt free? During past times of hyper-inflation, such as the German experience in 1922, the real winners were the debtors. In the process of inflating away its debt, the Wiemar Republic also took along all other debtors for the ride. The losers were any who had currency denominated assets, in particular cash holders and debtees, when the currency was re-denominated at 1,000,000,000,000 Papiermarks for one Rentenmark. That's a quick way to payoff your mortgage! (I assume debts were also re-denominated, but they would have long before been devalued due to the inflation that necessitated the re-denomination. Seriously, one trillion Papiermarks for one Rentenmark!!)

I'm not saying the United States will be going the way of interwar Germany, Zaire, or Venezuela anytime soon, but in a setup to increasing inflation, doesn't it seem prudent to carry some debt in exchange for tangible assets, in particular real estate or precious metals? Holding some debt puts you "in the game," as you said, and can act as a hedge against increasing inflation.

^^^I'm not saying the United States will be going the way of interwar Germany, Zaire, or Venezuela...But it sure looks that way!

Sigcrazy7;

No offense taken. Even when I went through my divorce, my lawyer lamented my lack of substantial debt. I was glad we didn’t have a $250k house to fight over, but that’s just me, I guess.
I realize some debt would be a hedge against hyperinflation, but I still prefer the peace of mind that comes from actually owning the things around me.
If things do rip, run or tear, I like the idea of at least having a place to live.

Taxes scare me, a bit. Turns out we just rent this dirt from the Gov.

quote:

Originally posted by sigcrazy7:
It is sustainable provided the dollar remains the world's reserve currency. Eventually, however, the rest of the world may tire of funding our largess, and switch to another reserve. Watch the transactions through SWIFT and see the percentage of transactions in dollars. Also, watch the percentage of foreign exchange reserves held in U.S. dollars. When those percentages begin to slip, it is a leading indicator of imminent devaluation of the dollar.

SWIFT sets up JV with China's central bank


https://www.reuters.com/articl...t-pboc-idUSL1N2KA0AK

By Reuters Staff

2 MIN READ


SHANGHAI, Feb 4 (Reuters) - SWIFT, the global system for financial messaging and cross-border payments, has set up a joint venture with the Chinese central bank’s digital currency research institute and clearing centre, in a sign that China is exploring global use of its planned digital yuan.

Other shareholders of the Beijing-based venture include China’s Cross-border Interbank Payment System (CIPS) and the Payment & Clearing Association of China, both supervised by the People’s Bank of China (PBOC), according to public information.

The new entity, called Finance Gateway Information Services Co, was established in Beijing on Jan. 16, and its business scope includes information system integration, data processing and technological consultancy, according to the website of the National Enterprise Credit Information Public System.

China is a front-runner in the global race to launch central bank digital currencies, having launched domestic trials in several major cities including Shenzhen, Chengdu and Hangzhou.

Its digital currency will help increase oversight of money flows, while also raising the efficiency of cross-border payments and facilitate yuan internationalization, HSBC said in a recent report. China’s cross-border payment system CIPS both partners and competes with SWIFT amid growing Sino-U.S. tensions.

Greater use of the CIPS instead of the Belgium-based SWIFT system would reduce exposure of China’s global payments data to the United States, BOC International (BOCI) said in a report last July. (Reporting by Samuel Shen and Andrew Galbraith; Editing by Kim Coghill)

https://www.zerohedge.com/mark...-digital-yuan-launch

No, it's not sustainable. The $15 minimum wage they are going to pass through budget reconciliation is going to finish the small business off COVID didn't sink. Not only will they not be able to afford to pay entry level people $15, but all the people who work there are going to want raises as well. A store manager making $16 an hour isn't going to want to be paid a dollar more than a kid walking in off the street. Debt will soar even higher, and the progressives will get what they want, the end of the middle class, and a reset.

You do realize that if everyone has to pay it, all the businesses are going to simultaneously raise their prices to cover it. it's just going to drive inflation, which will eat up any gains from the raises. But in the end it won't effect the companies bottom lines much.

I will think it will drive increased automation and job elimination. The way to beat the increases is to do the work without the workers.

quote:

Originally posted by Ackks:
No, it's not sustainable. The $15 minimum wage they are going to pass through budget reconciliation is going to finish the small business off COVID didn't sink. Not only will they not be able to afford to pay entry level people $15, but all the people who work there are going to want raises as well. A store manager making $16 an hour isn't going to want to be paid a dollar more than a kid walking in off the street. Debt will soar even higher, and the progressives will get what they want, the end of the middle class, and a reset.

quote:

Originally posted by Ackks: . . . Our economy is going to crumble, debt will soar even higher, and the progressives will get what they want, the end of the middle class, and a reset.

So there will be only two classes in society, the ruling class and the underlings. Hello Venezuela.

quote:

I will think it will drive increased automation and job elimination. The way to beat the increases is to do the work without the workers.

We are off on a tangent from the US debt... Is it sustainable?
But, yes... entry level workers are always the hardest hit by 'minimum wages'. The true minimum wage is 0 because that's what you make if you can't get a job.

The poster I replied to was mixing the debt/deficit with the minimum wage increase. I felt they needed separating. That is all.

quote:

Originally posted by chellim1:

quote:

I will think it will drive increased automation and job elimination. The way to beat the increases is to do the work without the workers.

We are off on a tangent from the US debt... Is it sustainable?
But, yes... entry level workers are always the hardest hit by 'minimum wages'. The true minimum wage is 0 because that's what you make if you can't get a job.

The US debt is currently will likely exceed $28 trillion and will probably exceed that amount by the end of the day. And, growing rapidly every second. And no, based on my minor degree in economics (years ago) there is no way we can pay it off. The outlays are growing faster than the income.

And that is just the national debt, not taking into account the various states" debt! Check out the national debt clock.

quote:

Originally posted by sigcrazy7:
The following is not a criticism. I quote your post only as a basis for discussion. In fact, I admire anybody's desire to be debt free, in particular for the psychological benefits it provides. Having said that...

If interest rates are at an all-time low, and there is a threat of increasing inflation due to deficit spending, what is the strategy to being debt free?

I'll answer that from my point of view and financial situation.

I haven't had a car payment since January of 1979, haven't had credit card or other loan debt since 1990 and haven't had a house payment or rent since 1994.

I essentially took the money I would have put into to all those payments and invested it. As a result I'm financially set.

The money is here and there, in all sorts of different investments and no matter what the government does, I'll still have plenty of money to do what I want. As I stated earlier, find out where the politicians will park their wealth and do the same and you'll come out fine.

That's the point for me.

quote:

Originally posted by BBMW:
You do realize that if everyone has to pay it, all the businesses are going to simultaneously raise their prices to cover it. it's just going to drive inflation, which will eat up any gains from the raises. But in the end it won't effect the companies bottom lines much.

I will think it will drive increased automation and job elimination. The way to beat the increases is to do the work without the workers.

Yeah, I absolutely realize that, and there will be inflation, but it will impact companies bottom lines. What do you think happens when purchasing power decreases? It's going to force small businesses that are already struggling to shut their doors, but that's their goal. It also means less companies paying taxes, which means more national debt. They want a reset and this is another step in the process. It's all related and it is not sustainable.

I go with it’s not sustainable, and won’t be paid off, other forces will come to deal with it. Eventually the whole federal budget will service ‘entitlement’ programs.

‘What can’t go on forever, won’t go on forever’. But then look at States with upside down budgets, they’re still around. They haven’t collapsed yet, and can’t print money. The decay may continue slowly.


https://usdebtclock.org/


Now we’re talking about student loan forgiveness, which is a payout to higher education in part. What about a student planning to start next Fall? What about the family who passed on the vehicle or house upgrade to pay for college?

Is the student who just payed off a loan the putz? Look at the group paying 90% of income taxes, then demonized at that.

AOC says paying off student debt will stimulate the economy? I can’t see $50k relief of student loans happening. If we want to throw those numbers around, give $10k to everyone & not the $50k to fewer.

I think we’re already well beyond our means. How about if we open up 100% of the economy & States & quit talking about ‘free’ money?

quote:

Originally posted by sourdough44:
Is the student who just payed off a loan the putz?

Yep. That'd be me. I'm the sucker who finished paying his $26k in student loans off early in 2020.

Guess I should have just waited for Uncle Sugar to give me a handout, right?

quote:

Originally posted by sourdough44:
Now we’re talking about student loan forgiveness, which is a payout to higher education in part. What about a student planning to start next Fall? What about the family who passed on the vehicle or house upgrade to pay for college?

Is the student who just payed off a loan the putz? Look at the group paying 90% of income taxes, then demonized at that.

My parents couldn't afford to send me to college, so I joined the Army to get the G.I. bill after I got out.

Then I went to school on the G.I. bill which wasn't much back then plus I worked an almost full time job all the while carrying around 18 credit hours every quarter.

I want my money paid back to me with interest if they're going to forgive student debt.

^^^^^^^^
Quickie, a while back I saw a study re the notable expansion in the volume/amount of student loans seemed to correlate with a similar curve in the increase in teacher/professor/staff compensation. And that seemed to correlate with a growing number of college graduates who gained no marketable skills in getting a college degree.

quote:

Originally posted by Scoutmaster:
^^^^^^^^
Quickie, a while back I saw a study re the notable expansion in the volume/amount of student loans seemed to correlate with a similar curve in the increase in teacher/professor/staff compensation. And that seemed to correlate with a growing number of college graduates who gained no marketable skills in getting a college degree.

And who then are forced to go into teaching the subject of their degree, because there are no other jobs in that field, and for which they then want extra compensation to help them pay off their exorbitant student loans, which raises tuition, thus perpetuating the cycle.

Reminds me of this, which has been making the rounds through social media:

quote:

Originally posted by Flash-LB:. . . My parents couldn't afford to send me to college, so I joined the Army to get the G.I. bill after I got out.

Then I went to school on the G.I. bill which wasn't much back then plus I worked an almost full time job all the while carrying around 18 credit hours every quarter.

I want my money paid back to me with interest if they're going to forgive student debt.

I have a similar background, and a similar demand to repay me, even though it was 45 years ago.