Microblog Memes

The idea behind grouping them is that all those "european countries" can act as one through EU coordination. So it makes no sense to separate them when talking about negotiating power.

Full disclaimer, I'm not a finance professional.

Thats the theory, but I'm guessing in real world applications it won't quite shake out like that.

As I understand it, existing bonds paid for past deficit spending by the US Government. New bonds are issued at regular intervals by the US for two reasons:

• to replace those bonds that have matured, but the debt still exists
• to generate new cash to pay for even more deficit spending.

Buyers for US bonds have two place to buy US bonds from:

• the US Government
• existing bond holders on the secondary market

Existing bonds that Europe holds have a fixed rate of return from when they were bought. So if Europe collectively started dumping US bonds in quantity, the value of the bonds would start to decline rapidly, but that wouldn't dry up the market for new bonds issued by the US Gov.

This would mean, that selling more bonds would become expensive for the US.

True!

The US Gov would have to raise the rate of return on newly issued bonds so that non-European investors interested in holding bonds would find the new US bonds more attractive because of the higher rate of return.

Potentially they won’t find enough buyers to fund their government.

Unlikely.

This will cost the US Government more to service the debt, but unless the entire world decided to stop buying US bonds, the US would not run out of money. As dystopian as the US government is right now, its still one of the best investments in this category. The USA has never once defaulted on its debt. The worst that has happened has been Quantitative Easing (aka "printing money") for a short time during the 2008 financial crisis, and once again in March 2020 during the worst (for financial markets) of COVID. Even then the US government reversed that with Quantitative Tightening (aka "shredding printed money") to raise the value of each remaining dollar in the system. Even with these historical actions, US government debt has been one of the worlds safest investments. Time will tell if that holds up or if trump blows that up too like all of our historically hard won alliances and soft power investments.

So existing bond holders worldwide would be hit hard. I'm guessing there wouldn't even be enough buyers for Europe to sell all their bonds at once, and they'd only be able to sell a fraction of them before the value of them plummeted. Europe could continue to sell what bonds they had, but they'd be losing significant amounts of money because they'd have to discount them to the point that the lower rate of return for those existing bonds was still a compelling investment for a bond buyer.

TIL
US is a Ponzi scheme and US used this fraud money to make weapons in order to steal more money (oil) and prevent creditors from getting their money back 🤔

They don't even have to sell what they've got. They just have to stop buying more and invest elsewhere instead.

The US runs on a perpetually increasing deficit. If that line were to stop going up, we'd instantly fall into a recession.

This might have been a factor for him backing of his invasion fantasies the first time.

Joke is on them, he is so vapidly stupid he forgot and is again threatening Canada.

To add context, part of getting Great Britain and France to back off in the Suez Crisis was Eisenhower threatening to sell off American owned debt in these two countries.

I will side with the lesser evil. But so far it's just empty words, they need to dump all of those bonds.

consider they are solely responsible for russians being able to launder money to trump since the 90s and got us to where we are now with him.

The Beaverton had an article the other day “Canada chooses lawful evil over chaotic evil”

I’ve also seen posts online along the lines of “I’d rather deal with lex Luther than the joker”

They need to sell more bonds though. Europe can flood the market, leading to a collapse of the bonds value.

That would mean, more debt would become increasingly expensive for the US, potentially to the point where they won't find more lenders.

I think you're missing the part where the US goes effectively bankrupt because it can't sell debt. Everybody loses.

one of them being TRUMP.

They have been busted for all sorts of stuff the controversies heading (which feels like a misnomer) in their Wikipedia is quite long.

That said they could still be correct here.