Something I've been postulating on in the usual autistic manner. How will bonds and treasuries be handled during the collapse. My understanding, which admittedly isn't the greatest when it comes to ultra-scale finance, is that the majority of Billion Dollar+ Companies will keep most of their "cash" in the form of T-Bills and Federal/Municipal bonds.
For all intents and purposes, Government issued bonds are equivalent to cash once you reach macro-scale finance for giant corporations. They're easily convertible into actual cash on demand, and even give a small amount of interest that's 100% tax free in the interim. So it all makes sense, given it would be next to impossible to safely store billions of dollars in cash, even using a cash management service like Intrafi, the maximum you could store using FDIC coverage would be $750 Million.
So here's my question for those autists and anons more knowledgeable in this realm. What's going to happen to the bond market during and after the financial collapse? I mean, we can't just let trillions of dollars in capital evaporate. That's the money that's used to pay people's wages for the majority of large and medium sized businesses.
I know I know. "I don't care what happens to (Insert large corporation)". And I get that sentiment. BUT, I do care about the people who work for said large corporations, and all the smaller businesses that rely on them. How will the farmers who provide the produce for say, walmart, get paid if all of walmart's liquid capital is poofed out of existence overnight. How will all the blue collar CNC Machine shop workers that make precision parts for GM, Ford, and Chrysler get paid if the big three don't have the capital to pay for their machining contracts? Etc. etc.
And that's not even touching the fact that the majority of banks in the USA actually take your money and invest them into US bonds and Treasuries. That's where the majority of you money you put into a bank goes, not to loans, or a vault. The overwhelming majority is invested in US treasuries and bonds as a "safe" investment. So this would also mean literally everyone in the country would essentially lose their money and have no means of recovering it.
My limited understanding from my business classes back in college, is that in the "unlikely scenario" of a default, the US Government may default on all FOREIGN debt, but may never default on debt owed to US Citizens. Meaning if push come to shove, we could dump all of our foreign debt, but any bonds or Treasuries owned by a US citizen or company will still have to be honored.
But when I tried confirming this, I found nothing to confirm that, which has me thinking my Finance and Business professors lied to us (shocker). And when I try to ask this question on any other forum I get the typical normie response of "It's impossible, the US can't default since its' the safest investment in the world". Even when I try to put forth a hypothetical question on the topic, it's apparently just so unfathomable to these people that it would happen.
Which led to me asking my fellow financial nerd anons and autists. What's your theory on this? Not something I've ever seen brought up before, and figured it was worth discussing.
EDIT: Since people keep mentioning silver and gold, let me point this out. Gold and Silver will be USELESS in this scenario. No one can buy your gold or silver if no one has money for it, and you can't trade it for non existent groceries and supplies because the producers aren't being paid. In this scenario all forms of "traditional currency" are essentially worthless, because we've devolved into a "Mad Max" type scenario since no one has any money and are desperate to meet their basic needs. The only things of value would be food, medical supplies, water, ammo, and weapons. Your gold and silver won't do you much good when no one cares about it because they're desperate for food and have more guns and ammo than you.
Hence why I believe there HAS to be a solution to this scenario, and why I'm asking for theories on what that solution may be.
We've gone bankrupt 3 times and are currently insolvent so its actually a very likely scenario. The most likely. If Trump gets back in, he has talked several times about defaulting. We will have to, eventually, if left on the same course and that's just simple math. Have never heard about obligation to pay us holders as opposed to foreign but in some ways would make sense. But bottom line is, several tranches and a large chunk, maybe the majority, will never get to be repaid. This will crush the bond market. You are right that on the macro scale everyone has to hold USTs, but that is changing. That is the big thing with de-dollarization-- no one has to hold it anymore. So prices will already be trending in that direction. It will have everything to do with people moving away from dollar. Too many dollars for less holders, will skyrocket inflation. For me the big question is how do we right size it? If they do a currency swap and we go to a real dollar, the bonds will still be dollar denominated, just a different dollar and we don't have to default. Imagine the US dollar gaining strength and it costs little, relatively, to retire a large amount of debt, so that's a possibility too.
I kind of figure that it'll be a situation where things will be "prorated" if that makes sense? Like, US based bond holders will STILL be honored, but instead of current face value, they'll be prorated to match the new USD instead of the Federal Reserve Note.
For example, a $1000 Bond will now pay out, say, $20, but that $20 is worth what it was in 1930. These numbers probably aren't correct, but I can't be bothered to do all the inflation/deflation adjusted math right now. I think I've got the point I was trying to make across though.
Yes, would be something like that. Would have to go back though and read the language but I think this is actually allowed for. And your math is probably not that far off. But yes will have to be something like that. Is the only way. The thing is, basically financial theory is based on the risk free rate (treasuries) and this is how all assets are priced. So if the UST were to suffer a massive impact, the flow-through effect would be incredible. You are only talking about USTs... what about the multi trillion dollar corporate bond market? Also implodes. You touched on it kinda in the thought that all govs/large corps have to hold them, but they also issue their own debt, which is also greatly dependent on that treasury rate. Anecdotal, but my first day of my masters my teacher put up a bunch of slides of Russian empire bond notes that were never honored by the bolsheviks. People spent years, and may still even be in litigation today, over unpaid notes from over 100 years ago. So they're not going away. If they can avoid default they will at all costs but somethings going to have to change.
Well lots of people seem to think we're going to see a complete and total collapse. I personally don't, but I do see a giant crash coming that will tank everything, which opens the door to reverting to a gold/silver backed currency (especially with the value of Gold and Silver sky rocketing without all of the artificial pressure being put on precious metals to keep the prices low by the colluding banks, hedge funds, etc.)
I was just thinking about what will happen during that collapse since I'm trying to use what happened to Iceland during the 2008 Crisis as a basis. They defaulted on their foreign debt, and just kept the debt they owed their citizens and domestic corporations, and now they're one of the only nations on the planet without a deficit and their money is actually worth something, but back then there was a lot of panic over everything.
It's honestly a really hard topic to research since there's so little about it in English. Most of the articles I've found are in Icelandic or Dutch.
I know shit about bonds, but I do know my silver will weigh the same....
The Government will force you to hand over all of your metals and give you some promise paper in exchange.
Kek
Remember we go plane loads of gold from the Vatican carried back to the US. IMO that should prevent a total collapse. I believe that will create a gold backed currency once Trump is back.
US will declare bankruptcy and it will all be gone. In exchange for destroying the dollar and all savings, all debts private and public will be abolished via NASARA theory. Everyone starts again fresh with any physical assets they have.
Yeah, no offense, but that's the dumbest take I've ever heard. You want to talk about wealth inequality, that's literally the best way to reset us to the feudal age. Let people start from zero with whatever physical assets they have. So people like gates who have hundreds of thousand of acres of land, and billions of dollars in real estate get to be the new aristocracy while your average joe has maybe a few thousand dollars in gold/silver to their name?
That's the exact opposite of what we're trying to do here.
The price is worth paying WWG1WGA
Where we are going we dont need USD
If you think that the white hats have a goal of abolishing capitalism in their process, you are mistaken.
How is that at all what I said? You're the one talking about allowing the current oligarchs to rule over us in the "post cabal world" by essentially handing them a feudal peerage to rule over while the rest of us struggle to find something to pay for basic necessities with.
You asked a specific question about bonds, and now you are ranting about oligarchs ruling us. Bill Gates might face a military tribunal for his crimes, but that is unrelated to the question you asked.
Because YOUR response would lead to that situation, and you're accusing me of saying something I never said (abolishing capitalism).
My guess is the mega rich will all be made whole. Its all fake and ghey. Cant have anyone high up be hurt... so as long as only the middle class and poor get fleeced then that is what will happen.
it's gone. Just like Everbank bonds. USA will file bankruptcy in a Swiss court or something to avoid having to pay bondholders.
It's ugly, get your wealth into physical silver and gold
See that doesn't set well with me. That's the type of thing that will cause a mass panic, leading a Mad Max Scenario. If people think they've literally lost everything, then there's no incentive to not devolve into tribalism. There has to be SOME kind of order to things to keep it peaceful and calm, otherwise we just end up in the exact scenario the cabal wants us to be in.
Besides, in this scenario, your physical gold and silver aren't going to be worth anything. Not like you can go to the local grocery store with a silver ingot and pay for your groceries, especially if there's not groceries coming in because the farmers aren't being paid. And there's the fact that roaming bands of bandits would probably just rob you for supplies while you're in public as well.
So yeah, in this scenario Gold and Silver are just as, if not more worthless than the bonds and cash. The only things of value would be food, water, medical supplies, and weapons/ammo.
I can only stockpile so much food and ammo, the rest I have in junk silver and krugs and a few bars.
Silver has kept its value for 5,000 years.
At a minimum the US Federal Reserve note HAS to lose value, whether it's 50% or 100% or some other number. That's just basic math. The out year obligations for Social Security, medicare, military retirements, etc. etc. are over 200 TRILLION. That's just jacks for openers. The system relies on new loans for money to be conjured out of thin air and put into the system, people are indebted up to their ears. Not everyone, but a vast majority. I could go on and on, but you get the picture. There is no rule that says things have to stay "peaceful and calm" and gold/silver are not for use during a mad max scenario, they are for your extra purchasing power to be stored ABOVE AND BEYOND what you feel you need to have to get through some unknown timeframe. It could be a day, a week, a year, no one knows. But you need to have preps stored that you noted in your remark. I don't know what is going to happen, but I would be prepared for the FRN's to lose a LOT of purchasing power in the next year or so.
I personally believe the opposite is true. It doesn't HAVE to lose value, we could simply just default on our debt and convert to a "new" system of asset backed currency. Don't get me wrong, I do believe there will be a rather sizable loss of purchasing power (there already has been), but everything going to zero just isn't an option in my mind.
And yes, things DO have to be "peaceful and calm". If people start shooting each other in the streets over basic necessities, then it's the exact same scenario as what the cabal wants.
My personal theory, is that we'll probably see a stock market crash worse than the great depression, which will drag everything else down with it (like currency losing 50% of it's value), which will result in us converting into an asset backed currency since gold and silver will be worth infinitely more without all the artificial pressure by banks, hedge funds, governments, etc. to keep the value down (it's generally accepted that silver SHOULD be worth between $5K and $50K and Gold should be worth between $50K and $100K based on inflation alone, but various cabal financial ogranizations collude to fix the prices and keep them down to the level they were at in the 80s for the most part.)
Assuming the generally agreed upon values are roughly true, then our current US Gold Reserves would be more enough to cover every dollar in circulation. And even more so if we retire a large portion of the currency to increase the value to pre central bank levels.
Of course that's just my theory, but it makes the most sense to me with the info we have.
Losing "value" and losing "purchasing power" is exactly the same thing. I didn't state it would lose 100% although I stated that it "could". My thoughts are the same as yours with regard to silver/gold. My statement was that things DON'T have to stay peaceful and calm, just because that's the way things turn out the best, although I hope you are correct. Anything can happen, but I'm hoping for the best as you are. But my initial statement is true, the FRN "HAS" to lose value, I didn't say all of it's value and defaulting on debt will guarantee a "loss" of value, just not necessarily 100%. In fact I doubt it would be 100%. I don't think we have much of a difference of opinion, perhaps just an interpretation issue.
I’m collecting Bottle Caps. I mean it works in Fallout. Kek!
Im actually curios about all this too. We keep being told to switch to gold and silver… Well, that’s all fine and dandy if you can afford to blow money on gold and silver instead of living paycheck to paycheck buying gas, paying rent, mortgage and bills, and trying to stay up on groceries right now! Yeah it’s all good right? No it’s fucking bullshit because 200+ million Americans CAN’T afford to buy Gold and Silver at all! At all! They don’t have even extra money for major auto-costs or medical bills.
So with that said, Trump has stated over and over not in these words but, the poor-middle class are the people that have been taxed and hosed the most by the current system. And things will be made great again, and Americans will have their buying power back. Well okay all you smart guys, how if people DON’T have the Capital or Money to begin shit, and are at $0 if not deeply negative long before Biden is removed, how are we/they supposed to get anything back?
All while the same elite type people that can afford gold and silver did buy, and they aren’t going to be indicted or arrested, are still thee Elites! So then what?! They can still afford to dominate and after 10-20 years can slink right back into full power. Why because THEY Have The Capital. So how does the “new system” or “gold backed dollar” help those 200+ million that have 0 to negative Capital to begin with?
There is a landscaper in Westerville ohio that only accepts silver right now...and indians that own little store near me will take silver for gas..kroger is looking into it..I have a small mortgage I plan on paying off w gold
your ones and zeros on a screen are worth more than my physical gold and silver?
gangs of bandits lol, I've got an armory and a team of rednecks just waiting for SHTF