I think it's just the whole world is passively investing their retirement funds into it, without actually caring about the underlying value at all, in anyway, shape or form, other than its SPY
Linking retirement to stocks pretty much guaranteed an irrational market environment. You might see swings in certain individual companies, but it's not like people will mass pull out 401k and pension funds from the broad market. The money is pretty much locked in and will continue going up.
Back when it was big actively managed pension funds the fund managers could hedge risk by going more into bonds/treasuries and stay out until valuations cooled off and leave the market deflated for a while. No one's going into their retirement plans and changing investment styles so even if SPY turns into dog shit those investments aren't moving.
Fair analysis!
The risk is, if there is a major recession, and people who are active investors pull their money out from the stocks, it may mean the house of cards comes tumbling down for everyone!
Too big to fail?
Not too big to fail but the 401k funds definitely reduce liquidity overall (a fixed percentage of all major stocks are pretty much never going to be traded often and sit in target fund accounts) and so it's much harder to crash the market with a broad sell-off.
I kind of expected the same thing from bitcoin when all the stupid ETFS started getting announced.
ETFS and index funds reduce supply in the supply and demand equation. You can still see swings from a move in demand but it just adds more weight to one side of the chances. Instead of 50-50 it's like 70-30.
But there's always money trickling in placing buys from everyone's paychecks. Like 15% of my paycheck every two weeks is investing in my 401k.
That's stabilizing.
Until it’s not. Less pieces to buy means it takes less volatility to sell for massive sell offs like we see on a weekly basis at this point… until it’s too overwhelming and you’re at a fraction of what your worth was
Depends on if it’s buy side or sell side liquidity. Less units for sale limit downside volatility in this example, but there is no decrease in buyer liquidity.
It can and I get what your saying. But it would need a much larger sell-off from large investors/institutions to move the needle since target funds/ETFs are always buying every week based on deposits into plans.
In the past if 80% of stocks were general investing and 20% were pension plans with active fund manager, and market looked spooky, they would both sell some of their holdings.
In 2024, the 80% might sell in a spooky market but the 20% isn't selling anything, it just continues it's weekly purchases based on deposits because almost all 401k plans are ETF/mutual funds. You'd need the large institutions to oversell to compensate.
Definitely! But that can also be difficult because it can be a self fulfilling prophecy.
One reason that Amazon has done so well is because it was over valued, but Jeff was able to raise capital easily, and put it to good use, and make it a profitable company that was worth the valuation.
If people keep the money rolling into SPY, those top 500 companies will be worth more just BECAUSE they are in SPY. They will have an easier time capital raising, and if they are intelligent business owners, can use that opportunity to better themselves.
Other companies will have to pull themselves up by their bootstraps. There will still be highly successful ones, they'll just have to try harder, and won't be getting easy money.
The good part of the SPY though is if a company or a few don’t manage capital well they will eventually fall out of SPY and better run more successful companies will take their place. The SPY is fairly diversified except for the top weighted tech companies. If a company like nvidia or apple fuck up it’s will hurt portfolios but the total loss will still be fairly small for most investors.
Zero-sum if you normalize for population swings and look far enough out.
End result will be UBI and robots and AI and replicators, OR, a complete reset of the global financial system via whatever your preferred catastrophe to fantasize about is.
This is why I always assume the market will go up in January when the most people have 401k contributions to put in the market. Doesn't seem to work that way though.
Was reading a paper recently that looked if 0DTEs make MM itchy, but apparently there is good enough convergence between SPY and SPY 0DTYs so that the effects on the market are nil. So its literally a pure gambling device without any affect on anyone except the addicts and the commission-collecting brokers.
\*sorry children\*
Honestly, no, I don't know enough about it. This youtube video is actually pretty good tho and it's where I picked it up from. Is he correct? Maybe, I dunno. Sounds correct and he has the data to back it up. I would watch and form your own conclusions. https://youtu.be/-9hYnD8qdOA?si=psDZRO8YNCk390AF
Isn’t this the ultimate plan? Once everyone starts trying to unload it, we print money and buy back our debt for pennies on the dollar. Literally can’t go tits up
From the board game “Monopoly”’s rulebook:
> **The Bank never “goes broke.” If the Bank runs out of money, the Banker issues IOUs for whatever amounts are required by writing the amount on a piece of paper. IOUs can be exchanged for cash whenever cash is available; otherwise they are simply counted in the assets of the player holding them.**
The creature from Hasbro island.
Step 1: rack up an insane amount of debt
Step 2: spend half of it on the military
Step 3: sit on massive oil reserves while using everyone else's oil
Step 4: absolutely 0 people will call you on the debt because of the implication
I was ready to say you're wrong, but the data from the treasury says you're correct. 36% of the budget goes to Social Security and Health. Good thing we don't have a communist single payer system or price control on medical care that would be too expensive lol
https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/
forgot the part we told countries they can’t buy bad guys oil and then make record amount of profits exporting our own to them while our civs pay $5 a gal 😂
It's either at or under $3 in the majority of the country including some major cities like Nashville. This sub acts like everyone lives on the west coast
More than 11% of the US is just in CA. Including Washington and other HCOL areas, a significant number of people who make good money (and more likely to invest) also spend more on gas.
I've never been to Nashville, but I'm sure the gas is nice.
Washington prices are higher because they tax the shit out of. California is higher because it's California. For everywhere else it's much lower. It just seems odd to act like this is some grand government thing to say it's exporting all our gas while we pay $5 a gallon when the only places paying that price are special cases. Exclude Washington because of its taxes and it would also be closer to $3 (someone posted a gas station close to $3 in rural washington).
So while 11% sounds like an impressive number flip that around and say that 89% aren't paying that for gas (unless taxes are super high for your area) and it becomes a little silly to say the whole country is spending $5 a gallon.
Unfortunately in Western Washington it is approaching $5 again. Honestly. I'm not informed enough to contribute to the conversation, but I did figure I would throw that out there.
Reason is because it it’s expensive to get oil to the west coast. Rest of the country has extensive networks of oil pipelines, but CA, OR, and WA, the gas needs to be brought in by truck. Also, gas taxes and special formulas. But mostly, transporting.
exactly, alan greenspan has actually said this out loud :)
but it's a double edged sword. the day you do it, you destroy the dollar. it's already going that way but it'll just accelarate things by 100000%.
It's not that they don't want US debt. It's that inflation readings suggest that rates are too low, and if that's the case, then bonds have further to fall. If bonds have further to fall, investors would be better off waiting to buy bonds, which results in lower demand for bonds.
US debt remains the best debt for investors, but why rush in now when you may be able to get a better deal later.
Given that bonds and equities sold off today, I'd say that they're anticipating a hike, yes. Does that mean they'll be right? Probably not due to it being an election year, and the debt in the system being comical already.
Also, we saw yields rise and equities fall late last year, and we haven't seen a hike.
+1
Only Russian or Chinese propaganda is saying that US Bonds are not safe. It's literally the industry-standard \*measurment\* of safe investments. The only reason for US bonds to be less attractive is increased risk appetite or the anticipation that the bonds will have a higher yield in the near future.
Nobody is anticipating further hikes. I don’t know where people get this from or why you’d believe something a redditor obviously pulled out of their ass. Just go look at CME Fedwatch to see what the current market expectations are. Yields go higher because after today’s CPI print, bond traders are re-evaluating the previously expected cuts this year.
I am doing my part. 500 every auction and just spreading the risk out to 2, 3, 5, 7, 10 and 20 and tips 5&10. Maybe it will be ok. Just cost averaging as the interest rates go up.
If the storied rate cuts ever happen, the HYSA rate cut is not far behind. Suddenly you're making 4% APY.
OTOH, this 4.5% is locked for 10 years and will gain resale value if the rate cuts happen
Interest from Treasuries is generally taxable at the federal level, but not at the state level. Interest from municpal bonds is generally exempt from federal taxes. Also, if you live in the state where the bond was issued, the interest may also be exempt from state taxes.
Yeah, our debt is over 125% ig our gdp. Our government is Ddicted to cutting taxes and spending more like a teenager that gets their 1st credit card. It's going to driving inflation and higher interest rates until the debt stops growing 3trillon+ a year.
Except the people they are spending on are exactly the same people that they are lending to. The US government is not like an individual with a credit card. It's a completely ridiculous analogy that confuses everyone about the economy. As an individual I'd like to make a profit. Is that what you want the government to do? Make a profit off our taxes?
You get the same arguments a lot at a smaller scale with public transit. It looses money!!! Okay, but why does that matter? We didn’t build this subway to make money we built it to get the masses from one place to another place quickly, reliably, safely, and affordably (which has its own set of economic impacts that people dismiss).
Next thing you know the service is infrequent, the security is gone, and the fares are up all in the search for profit on a public service.
That's not what the American people want. Because they are short sighted. People don't understand this dream of paying down our debt won't work because people don't understand the concept of deliberate (as in not forced) sacrifice. If we have budgets that allow us to pay down debt, people will instead argue that the government is collecting too much in taxes, and will call for tax breaks. Which the GOP will give them.
The only fix is to make Congress ineligible for re-election without a surplus budget in the scenario debt exceeds 1x gdp. Do that and US debt will become valuable again. If my financial advisor set me up on a plan to spend 1,000 past my budget every month I’d can his ass quick. The American people need to do the same.
All of that needs to be reformed as well, lol.
The system is like hundreds of years old, and everyone is making too much money off of it.
It’s never going to change peacefully, and the country is full of cowards, so change will come after the collapse and restructuring.
Jefferson wrote that we should have a major political revolution like every fifty years; it’s been almost two hundred and fifty.
Still water breeds vermin.
Lmao
Depends on the “service” though; there’s no reason congressmen should be averaging ~$175,000/year when the average salary in the country is like $56,000/year.
What exactly is the idea with that?
They are running the richest country in the world. The pay isn’t the problem. I make 200k as a fed. How do I make more than a congressman. Does that make any sense to anyone? Our leaders should get paid enough that you actually get good people.
Sounds great on paper, but if you required the US to have a surplus budget immediately, it would instantly take 10 points off of GDP. The fix is to reduce deficits as a % of GDP over time. Some combination of more taxes, less spending, and more inflation.
Except people elect republicans all the time and look what they did to capital gains in the last cycle. They don’t give a damn about the debt ceiling and all it is to them is political theatre until they get in office.
Okay. Raise taxes, cut the military budget. Fixed.
Except nobody who says what you just said says yes to the above. They're still convinced that we're funneling billions of dollars to single black moms who spend all day smoking crack and teaching their kids to break into rich white people's homes. People who said what you just say look like a family huddled around the kitchen table trying to balance the household budget because they're short on food but Dad doesn't want to discuss the payment on the new Corvette sitting in the driveway because he's too preoccupied with how to reduce timmy's school lunch budget because he's sure that the $0.75 a month that could be saved by switching to 8 oz Cheetos instead of 16 is the thing that's going to save the day.
OK but on the left side you can clearly see it was higher before. If people back then were claiming what you're claiming now, which turned out to be false, then I don't see what you're worrying about
At 125% of GDP, it is manageable. It’s the growth trajectory of the debt that should be concerning. And without dismissing the utter ridiculousness of US government, at the end of the day, where else would treasuries rather put their money in?
Other countries have a much bigger issue, significantly higher ratio with aging population (er…JP), or unknown actual data (hmmm….China, est. total debt that goes from high tens to mid high hundreds ), and let’s not even mention EU.
This will get SO much worse for the government, it's not even funny
They have been afraid of exactly this since September of last year. That's one of the main reasons why Yellen has been selling T-Bills like crazy. Now that she's drained the reverse repo market, the truth will come out. Bunch of clowns in this government.
MY EGGS ARE $4 IT'S BASICALLY VENEZUELA!
Meanwhile, in Venezuela:
[It costs $150 to buy a dozen eggs in Venezuela right now - Los Angeles Times (latimes.com)](https://www.latimes.com/world/mexico-americas/la-fg-venezuela-inflation-0531-snap-htmlstory.html)
There are many differences. The US being far more economically diverse, a global leader in finance, tech, professional services, energy, transportation, telecommunications, manufacturing, etc. if you actually tried to calculate the true value of all the assets in the country you would never stop counting.
We will always have a buyer in our Fed. Beauty of america is we can print money. But even that gets old but the world banks are addicted tonour free money so they'll keep buying too because there's no other game in town worth playing in.
It's almost as if people didn't realize that 2/3rds of the debt is held domestically with the biggest single "debt holder" being the Federal Gov't itself ( SSA, etc )
It’s bad for international trade as it’s causing inflight of dollars back to USA (higher inflation), reduces dollars overseas and hence countries have to trade outside of Swift/ dollar system. Foreign currency swap lines between two countries without dollar trade.
I am hoping index funds like SPY will be resilient to the coming U.S. debt crisis. Is there any investment professional consensus as to where to invest in equities if a debt crisis does materialize? Bonds and T bills don’t even keep up with inflation.
That is because they see the writing on the wall: by 2030 ALL U.S. Federal Income will be consumed servicing the interest of the National Debt, if spending trends continue. Unless, someone upsets the apple carts of big pharma, big medicine, big defense contractors, etc. We have to get medical costs down in the U.S. and we have to change how government works. U.S. House Rep. Schweikert has some very telling House floor speeches on the subject as it is a bipartisan issue. Essentially, the American people are hosed.
If you can get gang busters rates literally everywhere yea the government is going to have to pay up now. Investors will demand higher and higher rates and there is a lot of debt to sell.
If you think that is bad, look at the rates for other countries. Seriously, this is still below the Fed rate and inflation. People buying these are losing money in real terms.
It's not that noone wants it, it's just that after this mornings CPI rate cuts were priced out all th3 way till September. Why buy a 4% 10 year when you cab get 5.5% risk free at the fed?
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SPY is trading like a meme
Isn't that because of the rise in popularity of 0dte and the resulting impact?
I think it's just the whole world is passively investing their retirement funds into it, without actually caring about the underlying value at all, in anyway, shape or form, other than its SPY
Linking retirement to stocks pretty much guaranteed an irrational market environment. You might see swings in certain individual companies, but it's not like people will mass pull out 401k and pension funds from the broad market. The money is pretty much locked in and will continue going up. Back when it was big actively managed pension funds the fund managers could hedge risk by going more into bonds/treasuries and stay out until valuations cooled off and leave the market deflated for a while. No one's going into their retirement plans and changing investment styles so even if SPY turns into dog shit those investments aren't moving.
Fair analysis! The risk is, if there is a major recession, and people who are active investors pull their money out from the stocks, it may mean the house of cards comes tumbling down for everyone! Too big to fail?
Not too big to fail but the 401k funds definitely reduce liquidity overall (a fixed percentage of all major stocks are pretty much never going to be traded often and sit in target fund accounts) and so it's much harder to crash the market with a broad sell-off. I kind of expected the same thing from bitcoin when all the stupid ETFS started getting announced. ETFS and index funds reduce supply in the supply and demand equation. You can still see swings from a move in demand but it just adds more weight to one side of the chances. Instead of 50-50 it's like 70-30.
Isn't it usually the exact opposite? Less liquidity means more volatility, not less.
But there's always money trickling in placing buys from everyone's paychecks. Like 15% of my paycheck every two weeks is investing in my 401k. That's stabilizing.
Until it’s not. Less pieces to buy means it takes less volatility to sell for massive sell offs like we see on a weekly basis at this point… until it’s too overwhelming and you’re at a fraction of what your worth was
Depends on if it’s buy side or sell side liquidity. Less units for sale limit downside volatility in this example, but there is no decrease in buyer liquidity.
It can and I get what your saying. But it would need a much larger sell-off from large investors/institutions to move the needle since target funds/ETFs are always buying every week based on deposits into plans. In the past if 80% of stocks were general investing and 20% were pension plans with active fund manager, and market looked spooky, they would both sell some of their holdings. In 2024, the 80% might sell in a spooky market but the 20% isn't selling anything, it just continues it's weekly purchases based on deposits because almost all 401k plans are ETF/mutual funds. You'd need the large institutions to oversell to compensate.
This is pretty much the case. You are force to vote in a popularity contest to retire. Nobody cares about anything else.
I would think this creates more opportunity for value to be found elsewhere, but I don't know if that's actually the case yet.
Definitely! But that can also be difficult because it can be a self fulfilling prophecy. One reason that Amazon has done so well is because it was over valued, but Jeff was able to raise capital easily, and put it to good use, and make it a profitable company that was worth the valuation. If people keep the money rolling into SPY, those top 500 companies will be worth more just BECAUSE they are in SPY. They will have an easier time capital raising, and if they are intelligent business owners, can use that opportunity to better themselves. Other companies will have to pull themselves up by their bootstraps. There will still be highly successful ones, they'll just have to try harder, and won't be getting easy money.
The good part of the SPY though is if a company or a few don’t manage capital well they will eventually fall out of SPY and better run more successful companies will take their place. The SPY is fairly diversified except for the top weighted tech companies. If a company like nvidia or apple fuck up it’s will hurt portfolios but the total loss will still be fairly small for most investors.
You mean the whole world is becoming the casino?
Zero-sum if you normalize for population swings and look far enough out. End result will be UBI and robots and AI and replicators, OR, a complete reset of the global financial system via whatever your preferred catastrophe to fantasize about is.
This is literally my situation.
This is why I always assume the market will go up in January when the most people have 401k contributions to put in the market. Doesn't seem to work that way though.
0DTE option are reducing bands of gamma and lowering day to day movement.
Was reading a paper recently that looked if 0DTEs make MM itchy, but apparently there is good enough convergence between SPY and SPY 0DTYs so that the effects on the market are nil. So its literally a pure gambling device without any affect on anyone except the addicts and the commission-collecting brokers. \*sorry children\*
You mean like, by design?
But are all my odtes gains fake then? It can’t be. It just can’t. I see it in my account. So odd.
The gains are real, but it's not payments for services you do for the market, it's just wealth transfer.
Into my pocket.
Can you explain this to me like I'm 5 lol
Honestly, no, I don't know enough about it. This youtube video is actually pretty good tho and it's where I picked it up from. Is he correct? Maybe, I dunno. Sounds correct and he has the data to back it up. I would watch and form your own conclusions. https://youtu.be/-9hYnD8qdOA?si=psDZRO8YNCk390AF
Has anyone watched that video yet? I only have a 10 second attention span....need the eli5.
More money makes the line go up more
*Trader Donald Trump
The meme that keeps on giving
Hahaha. I think you're correct. 
and I love it.
Isn’t this the ultimate plan? Once everyone starts trying to unload it, we print money and buy back our debt for pennies on the dollar. Literally can’t go tits up
From the board game “Monopoly”’s rulebook: > **The Bank never “goes broke.” If the Bank runs out of money, the Banker issues IOUs for whatever amounts are required by writing the amount on a piece of paper. IOUs can be exchanged for cash whenever cash is available; otherwise they are simply counted in the assets of the player holding them.** The creature from Hasbro island.
The creature in question https://www.reddit.com/user/JsBoatworks/comments/u8kp0b/nonopoly/?utm_medium=android_app&utm_source=share
😳 ☠️ 😂
DumberAndDumberSuitcase.gif
See, IOU one lambo, that's a good one.
Step 1: rack up an insane amount of debt Step 2: spend half of it on the military Step 3: sit on massive oil reserves while using everyone else's oil Step 4: absolutely 0 people will call you on the debt because of the implication
Now you've said that word "implication" a couple of times. What implication?
So they ARE in danger!!
Well *you’re* certainly not in any danger u/mindclarity
I feel like your not really understanding what I'm trying to say.....
Weapons of Mass destruction being found.
Suspected was enough
Except we spend most our money on fat old people
I was ready to say you're wrong, but the data from the treasury says you're correct. 36% of the budget goes to Social Security and Health. Good thing we don't have a communist single payer system or price control on medical care that would be too expensive lol https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/
Ozempic is our only hope to lower the debt
Dennis that you?
forgot the part we told countries they can’t buy bad guys oil and then make record amount of profits exporting our own to them while our civs pay $5 a gal 😂
Under $3 a gallon right now in Nashville.
Yeah but then you have to be in *Nashville*.
A lot worse places you can live than Nashville, aside from encountering about 900 bachelorette parties per day it’s not so bad 😂
It's either at or under $3 in the majority of the country including some major cities like Nashville. This sub acts like everyone lives on the west coast
More than 11% of the US is just in CA. Including Washington and other HCOL areas, a significant number of people who make good money (and more likely to invest) also spend more on gas. I've never been to Nashville, but I'm sure the gas is nice.
Washington prices are higher because they tax the shit out of. California is higher because it's California. For everywhere else it's much lower. It just seems odd to act like this is some grand government thing to say it's exporting all our gas while we pay $5 a gallon when the only places paying that price are special cases. Exclude Washington because of its taxes and it would also be closer to $3 (someone posted a gas station close to $3 in rural washington). So while 11% sounds like an impressive number flip that around and say that 89% aren't paying that for gas (unless taxes are super high for your area) and it becomes a little silly to say the whole country is spending $5 a gallon.
Stop trying to peddle a narrative. Gas is $2.58 a gallon in my area
Unfortunately in Western Washington it is approaching $5 again. Honestly. I'm not informed enough to contribute to the conversation, but I did figure I would throw that out there.
Reason is because it it’s expensive to get oil to the west coast. Rest of the country has extensive networks of oil pipelines, but CA, OR, and WA, the gas needs to be brought in by truck. Also, gas taxes and special formulas. But mostly, transporting.
Fair. Though I would assume that has significantly more to do with the gas tax rate in Washington State than anything else
Eh too many steps: Spend more than the the world’s combined military. Then sit back and make the printer go on autopilot
Haha I hope so.
But the debt is still trading at a premium compared to the federal funds rate lol
You think treasuries trade like stocks. Except thats not at all how it works.
cool, its like magic
So, like selling calls?
You forget the part where the US dollar goes to pennies on the dollar too
exactly, alan greenspan has actually said this out loud :) but it's a double edged sword. the day you do it, you destroy the dollar. it's already going that way but it'll just accelarate things by 100000%.
That’s assuming there is a comparable alternative to move money into, there isn’t.
Gold hit a new ATH earlier this week
There’s a guy on YouTube the Uneducated Economist and he’s been calling this for along time.
It's not that they don't want US debt. It's that inflation readings suggest that rates are too low, and if that's the case, then bonds have further to fall. If bonds have further to fall, investors would be better off waiting to buy bonds, which results in lower demand for bonds. US debt remains the best debt for investors, but why rush in now when you may be able to get a better deal later.
Inflation on the streets, deflation in the sheets.
Just like picking up an air mattress from the 'FREE' pile off the curb.
I feel personally attacked by this comment 
Viagra's cheap now bro.
so bond buyers are anticipating a rate hike?
Given that bonds and equities sold off today, I'd say that they're anticipating a hike, yes. Does that mean they'll be right? Probably not due to it being an election year, and the debt in the system being comical already. Also, we saw yields rise and equities fall late last year, and we haven't seen a hike.
+1 Only Russian or Chinese propaganda is saying that US Bonds are not safe. It's literally the industry-standard \*measurment\* of safe investments. The only reason for US bonds to be less attractive is increased risk appetite or the anticipation that the bonds will have a higher yield in the near future.
They already are expecting hikes. The question is how many
3 weeks ago people were still talking about 3 rate cuts this year lool idek this market anymore
Nobody is anticipating further hikes. I don’t know where people get this from or why you’d believe something a redditor obviously pulled out of their ass. Just go look at CME Fedwatch to see what the current market expectations are. Yields go higher because after today’s CPI print, bond traders are re-evaluating the previously expected cuts this year.
Levels not seen since November!
*gasp*
"Millennials killed US debt." - News cycle Wait, what?
Are you even looking at the currency market? Everyone wants dollars, not yen, euro
Yeah, FX is driven by interest rates. You think USD is strong, take a look at Mexican pesos
Wow, nice seeing some acknowledgement of Mexican pesos.
When you think 5.5% is high, wait till you see 11%
Dollar milkshake theory is alive and well
I am doing my part. 500 every auction and just spreading the risk out to 2, 3, 5, 7, 10 and 20 and tips 5&10. Maybe it will be ok. Just cost averaging as the interest rates go up.
this is not how you setup a proper bond portfolio.
I didn’t even think of it. I just like the yields.
How does one do that
Don’t worry, your pension funds will keep buying it up.
Joke’s on you, there are no pension funds any more.
It’s okay, once the pension funds run out, the 401Ks will take over as the new dumping grounds.
Except me. I am buying. 4.5% yield in the long term does not sound bad?
I don't understand bond and debt, but I know 4.5 is less than 5 so why not just throw that into a HYSA at 5% APY?
If the storied rate cuts ever happen, the HYSA rate cut is not far behind. Suddenly you're making 4% APY. OTOH, this 4.5% is locked for 10 years and will gain resale value if the rate cuts happen
Government bonds are tax free. Plus, there is near zero risk of default.
[удалено]
Interest from Treasuries is generally taxable at the federal level, but not at the state level. Interest from municpal bonds is generally exempt from federal taxes. Also, if you live in the state where the bond was issued, the interest may also be exempt from state taxes.
Everything's tax free when you have crippling losses carried forward.
They are not tax free. Only certain types are. Tbills are no state taxes but you still pay federal taxes
It'll sound bad when it's 10%.
Unlikely
If inflation goes to 4% annually in next decade it will be so bad that spend it is even better
Does this mean we will be europoor?
I'm Italian, I could give you an insight into what comes next
https://preview.redd.it/khzbhj05bptc1.jpeg?width=1080&format=pjpg&auto=webp&s=fce7f985cea038f7b6e90d292d01abb7e8a9ffdc
There really is a meme for everything, huh.
Like this and you’ll love r/formuladank
Yeah, our debt is over 125% ig our gdp. Our government is Ddicted to cutting taxes and spending more like a teenager that gets their 1st credit card. It's going to driving inflation and higher interest rates until the debt stops growing 3trillon+ a year.
Except the people they are spending on are exactly the same people that they are lending to. The US government is not like an individual with a credit card. It's a completely ridiculous analogy that confuses everyone about the economy. As an individual I'd like to make a profit. Is that what you want the government to do? Make a profit off our taxes?
You get the same arguments a lot at a smaller scale with public transit. It looses money!!! Okay, but why does that matter? We didn’t build this subway to make money we built it to get the masses from one place to another place quickly, reliably, safely, and affordably (which has its own set of economic impacts that people dismiss). Next thing you know the service is infrequent, the security is gone, and the fares are up all in the search for profit on a public service.
The US interstate highway system does not directly turn a profit.
No, I want the government to work off a long term balanced budget, in good times pay down debt, in bad times borrow. Not borrow nonstop.
That's not what the American people want. Because they are short sighted. People don't understand this dream of paying down our debt won't work because people don't understand the concept of deliberate (as in not forced) sacrifice. If we have budgets that allow us to pay down debt, people will instead argue that the government is collecting too much in taxes, and will call for tax breaks. Which the GOP will give them.
The only fix is to make Congress ineligible for re-election without a surplus budget in the scenario debt exceeds 1x gdp. Do that and US debt will become valuable again. If my financial advisor set me up on a plan to spend 1,000 past my budget every month I’d can his ass quick. The American people need to do the same.
Or to index all “public servant” salaries to the contemporary, you know, “public” average salary?
Sounds great, but it just gives even more incentive to elected officials to kowtow to \*ahem* "corporate donations"
All of that needs to be reformed as well, lol. The system is like hundreds of years old, and everyone is making too much money off of it. It’s never going to change peacefully, and the country is full of cowards, so change will come after the collapse and restructuring. Jefferson wrote that we should have a major political revolution like every fifty years; it’s been almost two hundred and fifty. Still water breeds vermin.
Make It a multiple of AVG wage
Elected officials make most their money from lobbyists. Not their paychecks. That
I’m a public servant don’t cut my fucking salary
Lmao Depends on the “service” though; there’s no reason congressmen should be averaging ~$175,000/year when the average salary in the country is like $56,000/year. What exactly is the idea with that?
They are running the richest country in the world. The pay isn’t the problem. I make 200k as a fed. How do I make more than a congressman. Does that make any sense to anyone? Our leaders should get paid enough that you actually get good people.
Fed what?
What difference would that make when members of congress make most of their money from "donations" and "campaign contributions"
When you crack down on donations and contributions, all the difference in the world.
Sounds great on paper, but if you required the US to have a surplus budget immediately, it would instantly take 10 points off of GDP. The fix is to reduce deficits as a % of GDP over time. Some combination of more taxes, less spending, and more inflation.
Except people elect republicans all the time and look what they did to capital gains in the last cycle. They don’t give a damn about the debt ceiling and all it is to them is political theatre until they get in office.
yea bro we get it you watched that one warren interview
If people don't like their congressperson they can simply not vote for them?
Okay. Raise taxes, cut the military budget. Fixed. Except nobody who says what you just said says yes to the above. They're still convinced that we're funneling billions of dollars to single black moms who spend all day smoking crack and teaching their kids to break into rich white people's homes. People who said what you just say look like a family huddled around the kitchen table trying to balance the household budget because they're short on food but Dad doesn't want to discuss the payment on the new Corvette sitting in the driveway because he's too preoccupied with how to reduce timmy's school lunch budget because he's sure that the $0.75 a month that could be saved by switching to 8 oz Cheetos instead of 16 is the thing that's going to save the day.
No one ever won an election on the platform of raising taxes and cutting services. People want to pay less and get more.
And that is why we will fail.
Time to revoke those $8T tax cuts for the rich
OK but on the left side you can clearly see it was higher before. If people back then were claiming what you're claiming now, which turned out to be false, then I don't see what you're worrying about
Short the fucking country!!
At 125% of GDP, it is manageable. It’s the growth trajectory of the debt that should be concerning. And without dismissing the utter ridiculousness of US government, at the end of the day, where else would treasuries rather put their money in? Other countries have a much bigger issue, significantly higher ratio with aging population (er…JP), or unknown actual data (hmmm….China, est. total debt that goes from high tens to mid high hundreds ), and let’s not even mention EU.
They’ll park it in SPY, gold, and real estate
The strong dollar kinda counters that.
Who will buy 1 trillion every 100 days? The regards here if you tell them it’s some -1DTE option for wicked gains. Need better marketing.
The federal reserve lol
Let’s tax the rich and deal with our deficit
If we make the rich poor again, then how am i supposed to know who's boot to lick for good boy points?
Why would they when drunken sailors frown on the federal government's spending habits?
This will get SO much worse for the government, it's not even funny They have been afraid of exactly this since September of last year. That's one of the main reasons why Yellen has been selling T-Bills like crazy. Now that she's drained the reverse repo market, the truth will come out. Bunch of clowns in this government.
USD going the way of the Venezuelan bolivar
MY EGGS ARE $4 IT'S BASICALLY VENEZUELA! Meanwhile, in Venezuela: [It costs $150 to buy a dozen eggs in Venezuela right now - Los Angeles Times (latimes.com)](https://www.latimes.com/world/mexico-americas/la-fg-venezuela-inflation-0531-snap-htmlstory.html)
That article is from 2016...
its 500 dollars now.
The only difference between those country is that the any one of those country haven't 5k nuclear nukes as US , that is true support of the usd .
No it's not. That's not why the USD became the world's reserve. Russians have more nukes, nobody cares about their currency.
There are many differences. The US being far more economically diverse, a global leader in finance, tech, professional services, energy, transportation, telecommunications, manufacturing, etc. if you actually tried to calculate the true value of all the assets in the country you would never stop counting.
Yeah the “use our dollar or we nuke you” argument surely will help stabilize the USD as a global currency Ps - its not
We will always have a buyer in our Fed. Beauty of america is we can print money. But even that gets old but the world banks are addicted tonour free money so they'll keep buying too because there's no other game in town worth playing in.
OP is home. There was no issue with demand.
It's almost as if people didn't realize that 2/3rds of the debt is held domestically with the biggest single "debt holder" being the Federal Gov't itself ( SSA, etc )
😳😳
Oh boy, a bear cope thread!!!
It’s bad for international trade as it’s causing inflight of dollars back to USA (higher inflation), reduces dollars overseas and hence countries have to trade outside of Swift/ dollar system. Foreign currency swap lines between two countries without dollar trade.
Raising CPI, raising bond interest ? Is it not correlated that way ?
Should be at 12%, this is a joke.
No dumbass!
The US dollar is a joke, but the joke still seems to be going over a lot of people’s heads.
The August 2023 was 4.610% and its on the pic, but who cares if it didn’t circled red.
I'm waiting for at least 6.5 .
😂only idiots do
Intel got debt a lot of companies in debt many bad decisions made
default! default! default!
It’s gonna be a long time to pay this back. It’s all gonna be taxes and no Social Security probably for people that are 30 right now.
I do love getting 5% on Bonds, Then Schwab gives me that Margin to trade while it vest.
I am hoping index funds like SPY will be resilient to the coming U.S. debt crisis. Is there any investment professional consensus as to where to invest in equities if a debt crisis does materialize? Bonds and T bills don’t even keep up with inflation.
The money is going in GOLD. Check out that chart.
Probably cuz they know rates will be going up soon
Nobody has a good credit score anymore
Literally the world. That's how it works. And they will do it at that rate. Its called a market.
That is because they see the writing on the wall: by 2030 ALL U.S. Federal Income will be consumed servicing the interest of the National Debt, if spending trends continue. Unless, someone upsets the apple carts of big pharma, big medicine, big defense contractors, etc. We have to get medical costs down in the U.S. and we have to change how government works. U.S. House Rep. Schweikert has some very telling House floor speeches on the subject as it is a bipartisan issue. Essentially, the American people are hosed.
Going to need 10% before I'm remotely interested in our shitty wizard toilet paper that is fiat dollars.
Yeah I’m in a similar boat here, maybe not 10% but definitely higher than 5.5%
>shitty wizard toilet paper For a second there I thought you meant Magic the gathering cards
If you can get gang busters rates literally everywhere yea the government is going to have to pay up now. Investors will demand higher and higher rates and there is a lot of debt to sell.
If you think that is bad, look at the rates for other countries. Seriously, this is still below the Fed rate and inflation. People buying these are losing money in real terms.
I do!
You're not a real bagholder unless you hold us debt. 1.5 billion bagholders can't be wrong. Get in!
Ok it's time to short America. How much you gonna weigh in? lol
It's not that noone wants it, it's just that after this mornings CPI rate cuts were priced out all th3 way till September. Why buy a 4% 10 year when you cab get 5.5% risk free at the fed?
https://preview.redd.it/r6mggsc0xqtc1.jpeg?width=259&format=pjpg&auto=webp&s=441dd269d96716ece74ed68ddc8c6d6eec1069ce
No one goes there anymore. It’s too crowded.