Dan Romero pfp
Dan Romero
@dwr.eth
If US debt-to-GDP is such a problem, why aren’t US Treasury rates surging and other fiat currencies surging relative to the dollar?
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Dan Romero pfp
Dan Romero
@dwr.eth
The US balance sheet is not a household or a business that can go bankrupt. It’s a nation state with tax laws backed by guns. There are ways to decline, of course, but very different from people or companies.
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Giuliano Giacaglia pfp
Giuliano Giacaglia
@giu
Because the FED buys it suppressing the free- market to speak! That will translate to inflation. Least worst option. If your house is dirty and all other houses in the neighborhood are even dirtier, that doesn’t mean that your house is clean.
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Agost Biro pfp
Agost Biro
@agostbiro
It’s a fragility problem. It’s fine until it suddenly isn’t. The higher the debt-to-GDP, the worse the impact of the same drop in GDP on debt financing. Easy to get into a bad spiral. (CHF-USD is up 10% YoY btw, but that has multiple causes)
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ken pfp
ken
@kenergy.eth
Which other country would you consider purchasing gov backed bonds? Europe or China? They're all not looking too hot at the moment The US government might be the least worst borrower
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Les Greys pfp
Les Greys
@les
The blood of battle is normally observed after the war is won or loss, rarely during.
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William Saar pfp
William Saar
@saarw.eth
Allied countries will coordinate inflating away their debts. It's not like the EU lacks indebted countries and financial controls seem easier to conduct (like when Greece limited bank withdrawals for 3 years) CNY is still pegged to the dollar, but many believe it would surge if it was allowed to float
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Alex Poon pfp
Alex Poon
@alexpoon.eth
Big part of it is because USD is the reserve currency of the world
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Chris pfp
Chris
@piffie
First, gdp is a bad measurement of real efficiency, and can create false impressions, second there are countries with a much higher ratio, and third as the worlds reserve currency the usd not only references its own country, but probably most countries in the world… until it does not. So no issue, as long as it leads
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foxwizard pfp
foxwizard
@foxwizard
I feel like @hibiscuscultivar would have an idea on this.
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Luke Cannon pfp
Luke Cannon
@lukecannon.eth
Easier to imagine it’s not an immediate problem & will be staved off again, as has happened for years?
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Leighton pfp
Leighton
@lay2000lbs
Debt to GDP will stay high and the US won't default so treasury yields will stay low These aren't necessarily problems but they are heralds of a new financial system where money supply has been ceded to the government away from central banks. That's the meaningful part
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Andy Jagoe pfp
Andy Jagoe
@andyjagoe
markets can remain irrational longer than you can remain solvent
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T. Dylan Daniel | PageDAO pfp
T. Dylan Daniel | PageDAO
@epicdylan
Debt to GDP isn’t a problem for all of us. It is a problem for those who hold absurdly large hoards of USD. If you’re living paycheck to paycheck, it doesn’t matter to you if the currency rebases. But the wealthy, who sit on historic piles… well, they do not want to see this change and debt-to-GDP is their cry.
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Branksy Pop pfp
Branksy Pop
@branksypop
For the same reason alts don't surge relative to BTC. If $ goes down their all real economies will suffer too.
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vaughn tan pfp
vaughn tan
@vt
could it be that macroeconomic and monetary theory doesn't fully explain behavior
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Les Greys pfp
Les Greys
@les
This question living rent free in my head is epic.
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ebeezy pfp
ebeezy
@ebeezy.eth
Treasury rates remain subdued and the dollar steady bc the US remains a global safe haven and economic powerhouse. Many would rather invest in our economy than other economies.
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Mac Budkowski ᵏ pfp
Mac Budkowski ᵏ
@macbudkowski
Everyone was printing and has +/- the same problem. But in the last few months dollar def became cheaper from the EUR & PLN point of view
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Fred Blauer pfp
Fred Blauer
@fblauer
Seems to me that every country has their own central bank rates which determine their own government debt, which vary by lockin period and expectations etc. Its complicated and there are lots of different factors. But I think that you are over-simplifying and comparing apples and oranges.
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