USA government debt ceiling

[Zenaan Harkness]

On 10/11/15, Lodewijk andré de la porte <l at odewijk.nl> wrote:
> 2015-10-11 9:07 GMT+02:00 Georgi Guninski <guninski at guninski.com>:
>
>> On Sun, Oct 11, 2015 at 02:46:21AM +0000, Zenaan Harkness wrote:
>> > > QUESTION:
>> > >
>> > > Is there a citable reference for the debt of
>> > > $315 treeeeelion?
>> > >
>> > More info and explanations of the USA's gig is nearly up (and I'm
>> > pretty sure their last estimate of 2023 lates, is certainly much
>> > further into the future than the actual reset/collapse of US dollar):
>> >
>> http://english.pravda.ru/business/finance/08-10-2015/132278-us_treasury_swap-0/
>> >
>> > "There are $630 trillion in outstanding derivatives globally according
>> > to the Bank of International Settlements (BIS) in Switzerland. That
>> > is, about $630 trillion in bets placed on about $100 trillion in
>> > stocks and bonds."
>> >
>>
>> Interesting (but doesn't seem citable reference to me).
>>
>> How the financial market is still working?
>>
>> And how such bets survived so far?
>
>
> Counting derivatives as debt is definitely 100% misguided. They're also

Futures are derivatives, and potentially very large debts (or gains).
This is the nature of leverage - a small outlay, a much larger return
or loss. Although the loss is not certain (of course), it is possible,
thus...

> used to amplify market swings - make or lose more with less motion,
> therefore the oversizedness is not surprising. It makes markets more
> accurate, liquid and reliable (except f-ups get amplified too sometimes).

... that's the point ... when the gambles go the wrong way, for too
many people, then sometimes very large entities go belly up, as the
above article gives examples of. When this reaches a tipping point,
there is systemic collapse as we have seen historically. Then those
large entities ("too big to fail") can be "bailed out" by the tax
payer, or "bailed in" (the newest legislation here in Australia, and
possibly in US too) by simply grabbing some portion (up to 100%) of
all depositor's deposits.

If the big entity insurance (bail in or bail out) cannot compensate
adequately for the "debts", then the systemic collapse is a
depression/ full reset, rather than just a recession.

Whether one names derivatives as debt or not is immateriel - they
amplify shit when shit happens.


> Why not just read about this online? It's very public info.

Well that's what we're looking for, something a little more definitive/ citable.

Z