Comments on: Treasury credit default swaps rise dramatically http://www.creditwritedowns.com/2008/07/treasury-credit-default-swaps-rise.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: John Creighton http://www.creditwritedowns.com/2008/07/treasury-credit-default-swaps-rise.html#comment-1634 John Creighton Wed, 24 Dec 2008 18:55:42 +0000 http://www.creditwritedowns.com/2008/07/treasury-credit-default-swaps-rise-dramatically.html#comment-1634 Is the promise to repay on US treasuries a promise to repay in US currency or a promise to repay in foreign currency? Also what are they insuring against? Are they insuring just against the default risk or are they insuring against a loss of value of the treasuries to a given currency or commodity? If the promise to repay for the treasuries is in US currency then can't the fed just issue more treasuries to the federal reserve and then have the treasury department print more money to match the new debt? Is the promise to repay on US treasuries a promise to repay in US currency or a promise to repay in foreign currency? Also what are they insuring against? Are they insuring just against the default risk or are they insuring against a loss of value of the treasuries to a given currency or commodity? If the promise to repay for the treasuries is in US currency then can’t the fed just issue more treasuries to the federal reserve and then have the treasury department print more money to match the new debt?

]]> By: Edward Harrison http://www.creditwritedowns.com/2008/07/treasury-credit-default-swaps-rise.html#comment-110 Edward Harrison Wed, 16 Jul 2008 13:29:00 +0000 http://www.creditwritedowns.com/2008/07/treasury-credit-default-swaps-rise-dramatically.html#comment-110 Sobers,<br/><br/>You ask a good question. Confidence is a funny thing. It's there one day and then it's gone. If the US didn't have the reserve currency it would be in Argentina's position.<br/><br/>A major power shift away from the likes of the US and the UK is underway. Will it happen peacefully? Usually it does not.<br/><br/>Ed Sobers,

You ask a good question. Confidence is a funny thing. It’s there one day and then it’s gone. If the US didn’t have the reserve currency it would be in Argentina’s position.

A major power shift away from the likes of the US and the UK is underway. Will it happen peacefully? Usually it does not.

Ed

]]> By: Sobers http://www.creditwritedowns.com/2008/07/treasury-credit-default-swaps-rise.html#comment-109 Sobers Wed, 16 Jul 2008 12:42:00 +0000 http://www.creditwritedowns.com/2008/07/treasury-credit-default-swaps-rise-dramatically.html#comment-109 How far off is the day when those nations/individuals with the serious money (ie the oil/commodity producers and manufacturing nations) refuse to buy govt debt from countries such as the USA and UK? Will we see a government go bankrupt? Unpaid policemen, soldiers, doctors etc? When the end is nigh it can come very fast. Who would pay taxes if they thought the public officials collecting it and enforcing the tax law had disappeared because they weren't being paid? Or the police to arrest you for tax evasion? It could all fall down very quickly. It could be very significant that the Spanish govt recently pulled a bond issue due to lack of interest from buyers. Is this the sign of things to come for all the indebted Western nations? How far off is the day when those nations/individuals with the serious money (ie the oil/commodity producers and manufacturing nations) refuse to buy govt debt from countries such as the USA and UK? Will we see a government go bankrupt? Unpaid policemen, soldiers, doctors etc? When the end is nigh it can come very fast. Who would pay taxes if they thought the public officials collecting it and enforcing the tax law had disappeared because they weren’t being paid? Or the police to arrest you for tax evasion? It could all fall down very quickly. It could be very significant that the Spanish govt recently pulled a bond issue due to lack of interest from buyers. Is this the sign of things to come for all the indebted Western nations?

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