Oct 15, 2021
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US Treasury about a holiday for Russians: The day is coming when the dollar will be changed by 30 rubles

US Treasury about a holiday for Russians: The day is coming when the dollar will be changed by 30 rubles

Photo: Kirill Kukhmar / TASS

On October 7, the Capitol, according to overseas media, escaped the United States debt crisis, despite assurances from most American lawmakers that the national debt should no longer be raised. Recall September 20, the US Treasury Secretary Janet Yellen turned to Congress with another call to raise the federal debt ceiling, threatening heavenly punishment for America and the whole world. Say, there will be an unprecedented financial crisis, compared with which the collapse of the markets in 2008-2009 will seem like a paradise pastime.

The people in the United States, and in our country too, either ignore these threats or laugh at them. They say, we know, we have already heard that America will default so much that it will not seem like a little. And in general, this whole performance is already pretty tired. Who does not know, since the Second World Yankees shouting “boss, everything is lost!” raised their public debt ceiling almost 100 times to $ 28.4 trillion. This means that they will increase borrowing for the one hundred and first time.

Indeed, lawmakers with the smallest margin – 50 in favor and 48 against – voted in favor of a bill allowing the US federal government to borrow another $ 480 million, which Janet Yellen assured will last until December 3.

Interestingly, three weeks ago, the US Treasury Secretary expected that “X hour” (when the Treasury runs out of money to pay bills) will come in mid-October, or rather, she called October 18 the last pre-default day. Judging by the haste with which the national debt was raised yesterday – October 7, the US Treasury did not meet its own forecast. In any case, the Yankees will spend almost half a trillion dollars of additional borrowing in less than two months.

If we leave emotions aside and approach the situation with the US national debt pragmatically, then the talk that it can be raised even to the skies is not worth a damn. Back in 2011, a study by the Mercatus Center found that 43 cents of every dollar the US government spent on its own needs came from borrowing. This figure is about 4 times higher than in 1980.

The scarcity spending trend continues to grow at a depressing pace, says the Mercatus Center expert. In short, the Americans – people are far from stupid – have calculated everything. It turns out that the size of the national debt is not so terrible as the rate of its accumulation. And today it is transcendental. In short, a situation may occur when there is no one to borrow from.

Meanwhile, a correlation was found between federal borrowing and the high standard of living of Americans. According to a senior researcher at the Mercatus Center Veronica de Rugi, the Yankees would be much poorer if they did not have a dollar printing press.

In general, the question of what will happen in the world, including with Russia, if the US suddenly declares a default, does not seem ridiculous. Let’s start with how American newspapers write that “no one knows for sure when the US Treasury will run out of money to pay its bills. But it is known that the Ministry of Finance announced that the level of national debt is considered safe at $ 21 trillion, whereas now it is $ 28.4 trillion. “

Of course, the very idea of ​​America’s default seems so irrelevant that no one is waiting for it. “We do not believe, and the market does not believe that this is a likely scenario,” said Rob Toomey, Managing Director of SIFMA, one of the overseas financial diviners. If something goes wrong, the US Treasury will simply throw out the bondholders, which, for various reasons, cannot be repaid.

“Strange, but the securities in question are likely to simply disappear from the system. This is because if a bond is supposed to be redeemed – and paid off – on a certain date, the system assumes that it has been redeemed even if there was no money transfer. This simply illustrates the fact that the system is not designed to default, ”said the head of SIFMA.

It seems that the digital economy is a great tool for the masters of life. “You just find an empty place on your monitor, where yesterday nice numbers flaunted,” the blogger writes. fjhsd #… – There will be no trace that you have carried out electronic transactions. Your grievances mean nothing compared to the state security. ” True, for the US Treasury, there are huge disadvantages here as well: thrown investors will raise such a howl that mom does not cry.

However, no, large bondholders will still receive money automatically the day before default in the course of forced redemption, notes Rob Toomey. Consequently, there is an algorithm for responding to a default in America – for every fireman.

Moreover, there has already been a real threat twice. Thus, the US Congress was close to not raising the debt limit in 2011 and 2013. Moody’s analysts found it out. They calculated how much the “hassle” with the default cost the US economy and were horrified – in the loss of more than 1% of GDP or 1.2 million additional jobs.

In short, those who are sure that the national debt will be raised by a hundred percent are not so right, no matter what. By the way, Janet Yellen told the congressmen in detail what would happen to America if it defaulted. First of all, the Fed will sharply raise the rate, which will lead to a strong rise in borrowing costs.

It is not entirely clear how the players will behave. The option is not excluded that the value of the US dollar will collapse 2-3 times even in comparison with regional currencies, the overseas finance minister believes. The second option, on the contrary, will end with a rise in the dollar, if only because the falling US economy will drag the EU and partly China along with it.

The overseas blogging community and the “sofa” analytical fraternity on personal pages in social networks and on forums of concerned investors reacted to Yellen’s explanation with a flurry of comments. Here are some of them:

Joshua Engel: “Everyone will stop lending to America. The US Treasury will separately declare a holiday for Putin, when they will give 30 rubles for one dollar, which the Russians simply dream of. “

Joshua Engel: “An illiterate statement of the question: Janet Yellen will call the ECB mistress Christine Lagarde, the Chinese and Russian ministers Xiao Jie and Anton Siluanov, and they will find the money. It’s cheaper to save America than to be crushed by it when it falls. “

Stephen Haddock: “Actually, Yellen said nothing bad would happen. Learn to read between the lines. The default has already taken place. For example, the Chinese government cannot use some of the US debt it has to buy US companies. What? Stopped buying US Treasury bonds? No! I am sure that the troubles will last a couple of weeks, during which the stock exchange “vultures” will get rich, buying up bonds for next to nothing, so that later – after exiting the default – to sell them with multiple benefits. “

Curiously, many investors are really sure that trillions of dollars can be earned from the US default, and the United States will benefit, if only because they learn about temporary insolvency earlier than others. Numerous American insiders will go into gold to sell at their peak and buy back securities for next to nothing. “And after that you say that the US default is bad,” states Steven Haddock.

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