On October 16 2013 02:48 cLutZ wrote: Probably about time for world finance to reconsider what a "risk free asset" is anyways. But, yes, mismanagement by the treasury not paying coupon payments on outstanding debt would make the shit hit the fan.
It would be risk-free without that is effectively economic/financial suicide being committed. The US remains highly solvent (that is, financially able to pay off the debt), the issue remains liquidity (won't have the capital at hand because of ridiculous debt ceiling shenanigans).
Barring aforementioned politicking, US debt remains one of the safest assets available on the market currently (though it's very unlikely you'll get anything more than a miniscule return on it with current interest rates and QE in effect); part and parcel of the USD being used as the primary means of foreign reserve (though this will change over the next few decade[s]).
I dont think a wise person would ever consider sovereign debt of any kind "risk free", because there is no entity that can compel them to pay you. It has nothing to do with ability, it has to do with who can ensure you get your money if that entity doesn't want to pay you. With regard to America, the answer is no one.
that's an extremely extremist (hah) view to take...
by this logic there is NO risk free asset, period.
I would agree with this sentiment largely. More importantly, I think that people have, in the past, overly discounted the potential for political discourse and instability to affect the ability of countries to repay debts. The whole system is based on historically unprecedented norms created in the post WWII climate that inevitably would change.
I kinda wish I had invested in bitcoin when I first starting hearing news about it. Would actually have a lot more money than I do right now, given I heard the news back when it first was created.
On October 16 2013 04:05 phyvo wrote: I kinda wish I had invested in bitcoin when I first starting hearing news about it. Would actually have a lot more money than I do right now.
Growing up, my dad knew the guys who started ESPN. They invited him into it, but he declined saying "Who would want to watch a network of only sports all the time?"
On October 16 2013 04:05 phyvo wrote: I kinda wish I had invested in bitcoin when I first starting hearing news about it. Would actually have a lot more money than I do right now.
Growing up, my dad knew the guys who started ESPN. They invited him into it, but he declined saying "Who would want to watch a network of only sports all the time?"
*sigh* if only...
YOU COULD HAVE BEEN THE CHOSEN ONE TO BRING ESPORTS TO TV. Quick! Make a time machine.
On October 16 2013 04:05 phyvo wrote: I kinda wish I had invested in bitcoin when I first starting hearing news about it. Would actually have a lot more money than I do right now, given I heard the news back when it first was created.
Bitcoin would've been a great investment if you were one of the first, because you'd be able to effectively fleece all the people who are jumping on it now (and probably losing money on it). The wonders of deflation and a static money supply.
On October 16 2013 02:48 cLutZ wrote: Probably about time for world finance to reconsider what a "risk free asset" is anyways. But, yes, mismanagement by the treasury not paying coupon payments on outstanding debt would make the shit hit the fan.
It would be risk-free without that is effectively economic/financial suicide being committed. The US remains highly solvent (that is, financially able to pay off the debt), the issue remains liquidity (won't have the capital at hand because of ridiculous debt ceiling shenanigans).
Barring aforementioned politicking, US debt remains one of the safest assets available on the market currently (though it's very unlikely you'll get anything more than a miniscule return on it with current interest rates and QE in effect); part and parcel of the USD being used as the primary means of foreign reserve (though this will change over the next few decade[s]).
I dont think a wise person would ever consider sovereign debt of any kind "risk free", because there is no entity that can compel them to pay you. It has nothing to do with ability, it has to do with who can ensure you get your money if that entity doesn't want to pay you. With regard to America, the answer is no one.
that's an extremely extremist (hah) view to take...
by this logic there is NO risk free asset, period.
I would agree with this sentiment largely. More importantly, I think that people have, in the past, overly discounted the potential for political discourse and instability to affect the ability of countries to repay debts. The whole system is based on historically unprecedented norms created in the post WWII climate that inevitably would change.
Fiat money has a several thousand year history.
Im talking about political and financial stability, not fiat money. Before WWII there was a major continental war on Europe, Asia, or America just about every 20 years, usually following, or preceding massive financial shocks.
Decided, in the meanwhile that I save for X/Y and a 3ds, I'd play through some of my older pkmn games.
Turns out my I can't find my emerald preorder tin, which is where I kept my emerald, leaf green, diamond, platinum, and soul silver. FUUUU. All I can locate is my black and GBC Gold. T_T
EPT
