The dollar is getting stronger ??? - page 7
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Let's get back on track...
Even if the interest-only period is only 5 years, as in your previous post, although the conditions may vary and the period can be anything. But agreed, only 5 years and then interest & principal payments start. Right? I will enrich your vocabulary with a few more words: re-finance and rollover.
After five years you refinance, i.e. you get a new interest-only loan with the same or another bank for another five years. The old loan is automatically repaid with the new loan and you continue to pay only the interest on the same amount.
You cannot enrich my vocabulary, it is not very rich.
Let me give you a little insight. If you refinance, you may not be able to refinance (for various reasons) and you will have to increase your payments because the interest will be added to the amount you owe. That is when you might experience the beauty of insolvency.
Let me give you a little insight. When you decide to refinance, you may find it impossible to refinance (for various reasons) and you may have to increase your payments because the interest will be added to the repayment amount. This is where you might feel the beauty of insolvency.
Of course I can. And the US can get into it too. But if you're a good borrower, there won't be a problem. Banks need people who will pay them interest, it's their business. USA is a good borrower, so am I, we both have no problem with refinancing.
Here's your phrase:
<quote
Well, and a topic for reflection: who says debts have to be paid? Debts have to be serviced, and they don't have to be paid back at all.
< end quote
Although in fact: There are some debts that are absolutely necessary to pay and some that are not absolutely necessary. But both the first and the second have to be paid.
And the ones that don't have to be returned, but have to be serviced are the debts to the IMF.
The word 'obligatory' means that one may or may not pay it back. If you want, you can avoid paying back any debts by rollover.
To wrap up this little excursion into credit theory, I would like to draw some lines - you admit that you can only pay interest on a mortgage loan, which means that I haven't misled anyone. After all, it's so easy to say, "sorry timbo, I was wrong..."
Of course I can. And the US can get into it too. But if you are a good borrower, there won't be a problem. Banks need people who will pay them interest, it's their business. USA is a good borrower, so am I, we both have no problem with refinancing.
Generally speaking, yes. But the US will "close all its debts" by defaulting and crashing the dollar. And you? Although I understand ... you are right, but we do not have the same arrangement as in America, where everyone lives in debt and everyone is happy ... Eh... America is the land of opportunity! By the way, what Borag will do next about lending in the US is a question. Printing money again... what else...Again, what does it mean to "drain the dollar"? If it means lowering the exchange rate against other currencies, then the US does it all the time, but they are not very good at it. A cheap national currency is good for a normal economy. Europe, Japan, and the US dream about it and strive for it, but their economies are so strong that no economists can do it.
Cheap national currency you say is good for a normal economy,... yes maybe for Japan it is justified, they have no problem with the economy as well as the interest rate...it is quite profitable for them to lend,... but the other countries have doubts... on this issue, you must be forgetting the elementary economic relations of export and import debts,... from the fact that each country is trying to lower its exchange rate... nonsense nonsense nonsense... again justified by the political and economic premise of currency as a "product of nationality". The question of which currency is best... The one you pay with every day in the shop is the best. The same goes for the country! Here the question 'best' was meant to be unproblematic, stable and economically sound! And as for the answer to all these questions... There were no such questions in this post and the post is called something else, so I do not see the point in describing both the theoretical and practical answers to these questions, there is an opinion or conclusion from all these answers, which I just described above!
Europe, Japan, USA dream about it and strive for it, but their economies are so strong that no economists can do it!
HA! Where is it that the US has a strong economy, are you not confusing anything? Open up history and look at how the US has evolved with foreign economic debt for half a century, it's not more likely they have a strong economy, but a great well thought out political strategy! Rather the EU countries have no right to contradict this policy and have to go along with it,. thereby strengthening both the US economy and everything else. With such an amazing economy they would now make a "20k" to solve such problems,...yes of course not! Now a little while longer and if countries don't help the US further its economic development and the US goes into decline,... They will not think twice, it will be a political move to attack one of the countries, ... no matter which, as long as they show their intentions ... just like with Iran or Iraq, I could be confused,... everything is not just for fun, and it could all happen again... and all these economic indicators will not matter what they are and what they mean,... everything will be much simpler!
On the whole, yes. But the US will "close all its debts" by defaulting and crashing the dollar. And you? Although I understand ... you're right, but we don't have the same setup as in America, where everyone lives in debt and everyone is happy ... Eh... America is the land of opportunity! By the way, what Borag will do next about lending in the US is the question. Printing money again... what else...
A private person can also default, i.e. declare bankruptcy and all debts will be "closed". After that, he will be branded as a bad person and no one will lend him money. That is why decent people do not do that. Decent countries, even less so. A good reputation is worth more than any money.
That is the way it is all over the world, not just in America. We were talking about world finance, and "you, where it's not like that" (where is that, by the way?) is hardly the world's financial centre.
Cheap national currency you say is good for normal economy.... yes maybe for Japan it makes sense, they have no problem with the economy as well as the interest rate,...it is quite profitable for them to lend,... but the other countries have doubts... on this issue, you must be forgetting the elementary economic relations of export and import debts,... from the fact that every country is trying to lower its exchange rate... nonsense nonsense nonsense nonsense...
Any normal country tends to export more and import less, i.e. earn more and spend less, which is logical enough. A cheap national currency helps to stimulate these aspirations, exports become more profitable and imports the opposite, which stimulates the development of local production and import substitution. On the positive side, we have Russia in 1998 when after the default the national currency fell by 4 times and this had a very positive effect on the development of local businesses. On the negative side, Russia in 2007, when the oil money and the high ruble exchange rate killed nearly all local production, because it was cheaper to import than to produce. Import absolutely everything, including food. This threatens the loss of food independence.
Consequently, normal countries try to reduce the exchange rate of their currencies. An example is China, which stupidly prints the yuan and buys all the dollars coming from exports, China is spinning the inflation flywheel in the country just to prevent the growth of the national currency. And a strong export-oriented economy automatically appreciates the currency. Why is China buying US bonds? It simply has no choice, its dollars are filthy, it needs something to do with them, somewhere to invest, so it has to invest in bonds.
What part of this is "bullshit bullshit and bullshit", please argue.
HA! Where does the US have a strong economy, are you not confused? Open history and see how the USA has developed with foreign economic debt for half a century, rather they have not a strong economy, but a great well thought out political strategy! Rather the EU countries have no right to contradict this policy and have to go along with it,. thereby strengthening both the US economy and everything else. With such an amazing economy now would make a "20k" to solve such problems,...yes of course not!
There's no need to confuse the soft with the soft. A strong economy is in no way inconsistent with a lot of debt. And the US economy is the largest economy in the world. The presence of debt just shows that their spending is also the biggest in the world, even more than their income, they have to borrow. But if debt servicing is not too much of a strain, then why not borrow a trillion or two. Especially if that money is not going to be spent on munchies, but invested in something useful/pleasant/needed in the household.
But if debt servicing is not too much of an issue, then why not borrow a trillion or two. Especially if the money will not be spent on munchies, but on investments in something useful/pleasant/necessary for the economy.
And that's what we're talking about. 1-2 trl $ for USA (~5-10% of GDP) is ok, it's just money for minor needs, but not 80-90%(!00% not far off!!!) of GDP. And if by maintenance we mean the printing press - it would be a lot more fun than Zimbabwe.
That's what we're talking about - 1-2 trl $ for USA (~5-10% of GDP) is ok, it's just a flow of money for minor needs, but not 80-90%(!00% is not far off!!!) of GDP. And if by maintenance you mean the printing press - that would be a lot more fun than Zimbabwe.
Why not 80-90%, what scares you so much? Let's skip the exclamation points and put the numbers in an Excel spreadsheet.
Let's say your personal GDP is 2 grand a month, that's 24 grand a year. You can borrow at 4% per annum. You only pay the interest, and plan to repay the principal at some point in the distant future, when you get very rich. You borrow 100% of your GDP, i.e. 24 grand, and have your flat remodeled. You pay interest of only 80 monetary units a month.
Bottom line: you get two grand a month, enjoy a quality apartment and pay a percentage of a measly 80 units. Would that bother you? Somehow I don't think so, and that's a debt of 100% of GDP. Why should the US be so stressed out over such nonsense? Just because 11 trillion seems like a big number to you?