Lmfao yeah ok pal, the banks are going to start denying the federal government loans. Yeah right. I bet the Fed won’t even use their authority to set bank interest rates as a response, will they? Or maybe all the banks will just stop giving out all loans forever? What a crock of shit.
How on earth would the federal reserve adjusting interest rates improve the US’s situation if they were defaulting on loans? For starters, big loans like the ones the govt borrow are generally are not variable interest, they’re fixed rate. Second treasury bills have guaranteed maturity rates based on their yield, that’s why they’re generally considered a safe investment - again, the fed adjusting rates would do what? Zip. Except maybe make groups panic sell their bonds out of increased concerns of US stability.
The US was already downgraded by all the major credit rating firms, in 2011 and the most recent downgrade was May this year - they mostly came on the heels of debt ceiling raises by congress. Its not likely to happen anytime soon, but yes - if the US’ credit rating dips further, bankers and investors will not want to buy US treasury bonds. This has already affected the interest rate the US govt must pay on loans (increased them). Eventually if it gets low enough, the government will not be able to secure loans because the banks will consider them too risky, that’s how the banking system works. Somehow you seem to think the US govt runs the banks, or owns them? It don’t. It must pay back every cent it borrows, or the financial system of the US will circle the drain - just ask Greece, or Spain… Or… https://en.wikipedia.org/wiki/List_of_sovereign_debt_crises
Lmfao yeah ok pal, the banks are going to start denying the federal government loans. Yeah right. I bet the Fed won’t even use their authority to set bank interest rates as a response, will they? Or maybe all the banks will just stop giving out all loans forever? What a crock of shit.
How on earth would the federal reserve adjusting interest rates improve the US’s situation if they were defaulting on loans? For starters, big loans like the ones the govt borrow are generally are not variable interest, they’re fixed rate. Second treasury bills have guaranteed maturity rates based on their yield, that’s why they’re generally considered a safe investment - again, the fed adjusting rates would do what? Zip. Except maybe make groups panic sell their bonds out of increased concerns of US stability.
The US was already downgraded by all the major credit rating firms, in 2011 and the most recent downgrade was May this year - they mostly came on the heels of debt ceiling raises by congress. Its not likely to happen anytime soon, but yes - if the US’ credit rating dips further, bankers and investors will not want to buy US treasury bonds. This has already affected the interest rate the US govt must pay on loans (increased them). Eventually if it gets low enough, the government will not be able to secure loans because the banks will consider them too risky, that’s how the banking system works. Somehow you seem to think the US govt runs the banks, or owns them? It don’t. It must pay back every cent it borrows, or the financial system of the US will circle the drain - just ask Greece, or Spain… Or… https://en.wikipedia.org/wiki/List_of_sovereign_debt_crises
Lol bro doesn’t get it