Refusing to pay US debt to China, 1.1. Trillion, as floated by Trump would destroy USD purchasing power/ in addition barring pay to US states illegal
We have been rained on by high grade lunacy from the WH this last week. To recap:
There have been due to panic and sheer incompetence two strains of high grade financial lunacy floated in the WH. One with regards to Chinese held debt, 1.1. trillion USD, and another with regards to Trump thinking he can magically refuse to help states with the Conavirus, unless they abandon vote by mail, in November. The two ideas have at their basic root escapist economic fantasy and in the second matter, felony level voter suppression. The first idiot suggestion is brought up below,whereas we will in the second part delve into Trump's ILLEGAL scheme as to withhold funds to states unless the states kowtow to Trump over sanctuary cities and voting by mail
The common theme to all of this is NORMAN PEALE fantasy on steroids, and it is dangerous.
First the 1.1 trillion USD debt to China, and what Trump thinks is a simple solution.
The White house, under the influence of economic MORON Navarro thinks that there is a magical way to retaliate against China, i.e. of repudiating 1.1. trillion USD in debt owed to China. What would happen?
1. Derivative markets world wide would implode. i.e. and also the USA would find that the USD would not be honored in swapping USD for foreign currency. I.e. think of as an example how US travelers buy foreign currency when overseas. After this suicide by finances move, the USD would be less than 1% of its current worth as measured against the Euro and the Chinese RMB. and it gets WORSE
2. Another item. US obligations as far as paying its overseas creditors would not disappear. The historical skew line comparison is Weinmar Republic Germany in the 1920s.
I.e. when the German Deutchmarke was so devalued that it took wheelbarrows full of bank notes to buy a loaf of bread, what happened is that the German government refused to pay war reparations. In retaliation the French military occupied the Ruhr valley, next to the Rhine river, abruptly taking over 59% of German manufacturing industry in the process. The remaining center of industry was German Silesia, was still under German control, but until the USA in the 1920s paid German war reparations to France, for expediting the withdraw of the French army from Germany. Still though the region of German territory west of the Rhine river was demilitarised and not really under German control until Hitler re occupied it in 1936.
Point is, that the USA would find itself in terms of money debt as hobbled as the late Weinmar Republic. I.e. debt and obligations are forever.
3. We import so much manufactured parts from overseas just to RUN our economy, and that not being able to do so would flatten automobile production in CONUS, as well as hobble computers, electronics, oil imports and also, not least Rare Earths from Inner Mongolia, PRC. I.e. the USD would be so diminished in value that on a granular industrial production level, the ability of the USA to produce necessary machined parts for civilized life as the USA thinks of it in CONUS would be NON EXISTENT.
The following article from Politico summarizes some of what I have brought up
Quote
POLITICO
Morning Money
Why we can't 'cancel' U.S. debt held by China
By BEN WHITE and AUBREE ELIZA WEAVER 05/01/2020 08:00 AM EDT
Editor’s Note: Morning Money is a free version of POLITICO Pro Financial Services' morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.
QUICK FIX
Why we can’t “cancel” U.S. debt held by China — The Washington Post ran a story suggesting that President Donald Trump and some of his advisers want to retaliate against China over claims the Chinese withheld critical information about Covid-19. The story included this completely insane threat: “Some administration officials have also discussed having the United States cancel part of its debt obligations to China, two people with knowledge of internal conversations said.”
It should go without saying — but we suppose it has to be said — that any such move would essentially explode global financial markets. The Chinese own around $1 trillion in U.S. Treasury securities. They along with the Japanese and many other nations fund our debt and deficits. U.S. Treasury bills and the dollar underpin global financial markets. And the full faith and credit of the U.S. government to meet all its debt obligations is the main reason this is possible.
Any move to “cancel” debt held by China — i.e. default on it — would destroy the full faith and credit of the U.S., send U.S. interest rates soaring and could ignite a global financial catastrophe. So when MM asked top White House economic officials about the suggestion, they were lightning fast to deny it, replying within moments, which as any reporter knows is not always the case.
Senior adviser Kevin Hassett texted: “False story. We would never even entertain a default on any U.S. debt.”
NEC Director Larry Kudlow texted: “Absolutely not. Full faith & credit of US debt is sacrosanct. And so is dependable currency as world’s reserve currency. Period. Full stop.”
We have no issue with our friends at The Washington Post reporting this. No doubt the advisers they cite are real and said these things. They just happen to be very crazy things to say. The Chinese know we (almost certainly) won’t do this. But just saying it out loud at least raises some risk they would start dumping U.S. debt which would be … really bad for the U.S.
Muzinich to the rescue on PPP — Zachary Warmbrodt, Nancy Cook and I scooped that Treasury Secretary Steven Mnuchin has tapped his most trusted lieutenant to help guide the $670 billion small business loan program that's intended to save millions of jobs during the Covid-19 pandemic, amid widespread concerns about its execution.
Two senior administration officials told us that Mnuchin recently dispatched Treasury Deputy Secretary Justin Muzinich to the Small Business Administration to sort out the Paycheck Protection Program, which has had a rocky rollout since its hurried April 3 launch. A senior Treasury official later confirmed the assignment.
More crummy data today — New jobless claims came in about as expected at 3.8 million, which is still a terrible number and pushes us over 30 million in six weeks, or 20 percent of the entire American workforce. Insane. The number should continue to creep down but as one senior Wall Street executive told us the climb back may be complicated not just by slow re-openings and possible virus rebounds but by the fact that companies may come out of this realizing they don’t need as many people as they thought to operate.
Today we get a report on manufacturing that will show the full impact of the lockdowns. The ISM report on manufacturing out at 8:30 a.m. is expected to drop from 49.1, already a bad number pre-virus, to 36.3, an absolutely abysmal recessionary figure and the lowest since December of 2008 during the worst of the financial crisis.
End of quote
Let us move to voting by mail and voter intimidation.By threatening to withold Federal funds to states over mailed ballots.
https://twitter.com/KamalaHarris/status/1263267462805704705
Tweet
Also see this
Quote
'Talk with your lawyer, Bill Barr:' Kamala Harris warns Trump against attempt to 'suppress the vote'
William Cummings, USA TODAYPublished 9:43 a.m. CT May 21, 2020
President Donald Trump follows up on tweets threatening to hold up federal funds for two election battleground states that are trying to make it safer to vote during the pandemic by insisting that "mail-in ballots are very dangerous." (May 20) AP Domestic
Sen. Kamala Harris tore into President Donald Trump Wednesday night for his threat to withhold federal funds from states over absentee ballots, warning such an act would be illegal.
"Mr. President, it is a federal crime to withhold money from states with the purpose of interfering with people's right to vote," the former California attorney general told MSNBC host Joy Reid.
"So, you may want to talk to your lawyer, Bill Barr, about that," Harris added, in an apparent swipe at the independence of Attorney General William Barr, whom critics have accused of acting more like the president's personal attorney than the nation's top law enforcement official.
On Wednesday morning, Trump said in a tweet that Michigan had sent millions of voters absentee ballots "illegally and without authorization by a rogue Secretary of State."
"I will ask to hold up funding to Michigan if they want to go down this Voter Fraud path!" wrote the president, who has railed against efforts to expand mail-in-voting in response to the coronavirus pandemic.
'Voter Fraud path!': Trump threatens to stop funding for Michigan if absentee ballot forms sent to all voters
Kamala Harris
?
@KamalaHarris
.@realDonaldTrump, you may want to call your lawyer Bill Barr.
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The president was referring to Michigan Secretary of State Jocelyn Benson's announcement on Tuesday that absentee ballot applications – not actual ballots – would be sent to all of the state's 7.7 million voters, giving them the option to receive a ballot in the mail to vote in the Aug. 4 primary and Nov. 3 general election, rather than going to a polling place.
While it is illegal in Michigan to send absentee ballots to voters who do not formally request them, it is far from clear that there are the same legal hurdles to sending applications for the absentee ballots to registered voters, though it could be challenged in court.
Trump later deleted the initial tweet to clarify he was referring to applications, and not ballots, though that was the only aspect of the tweet he changed.
USA TODAY/Suffolk Poll: Americans overwhelmingly support vote-by-mail push, but Republicans more wary
Donald J. Trump
?
@realDonaldTrump
Michigan sends absentee ballot applications to 7.7 million people ahead of Primaries and the General Election. This was done illegally and without authorization by a rogue Secretary of State. I will ask to hold up funding to Michigan if they want to go down this Voter Fraud path!
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"To have this kind of distraction is just ridiculous," Michigan Gov. Gretchen Whitmer, whose state is facing a massive flood on top of the coronavirus pandemic, told "CBS This Morning" on Thursday.
"Threatening to take money away from a state that is hurting as bad as we are right now is just scary, and I think something that is unacceptable," Whitmer said.
The president made a similar threat against Nevada, where Republican Secretary of State Barbara Cegavske has ordered an all mail-in election for the state's June 9 primary – which has no bearing on the presidential race because Nevada held its Democratic presidential caucus in February, and canceled its Republican presidential caucus.
Cegavske, whose decision was upheld by a federal judge earlier this month, defended the move as "necessary and prudent" in order to "protect the health and safety of voters and election workers," in a statement responding to the president's tweet.
The vote and COVID-19: More than a dozen states have delayed their primaries due to coronavirus
Donald J. Trump
?
@realDonaldTrump
State of Nevada “thinks” that they can send out illegal vote by mail ballots, creating a great Voter Fraud scenario for the State and the U.S. They can’t! If they do, “I think” I can hold up funds to the State. Sorry, but you must not cheat in elections. @RussVought45 @USTreasury
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"For over a century, Nevadans, including members of the military, citizens residing outside the state, voters in designated mailing precincts, and voters requesting absentee ballots, have been voting by mail with no evidence of election fraud," Cegavske said.
"For the President to threaten federal funding in the midst of a pandemic over a state exercising its authority to run elections in a safe and legal manner is inappropriate and outrageous," said Nevada's Democratic Gov. Steve Sisolak in a response to Trump on Twitter.
Trump, who himself votes absentee, has said voting by mail is a "dangerous thing" and "subject to tremendous corruption," despite a lack of evidence that there is a statistically significant amount of fraud in the five states that conduct their elections entirely by mail.
Indiana election officials' message: Please, please, please vote by mail
In a March 30 "Fox & Friends" interview, Trump also said he feared a shift to vote-by-mail could lead to "levels of voting that – if you ever agreed to it – you'd never have a Republican elected in this country again."
Harris said she believed the latter concern was the primary reason Trump tweeted his threats against states shiting to mail-in ballots.
"He is always in the business of attempting to intimidate, and using his tweets as the method by which he does that," she said. "But also it's clear that he's worried about whether he's going to win this election."
Harris, who is on the list of potential running mates for the presumptive Democratic nominee Joe Biden, said Trump's aim was to reduce the number of people voting because he thought it would improve his chances of reelection.
"This is another example of Donald Trump being complicit with an attempt, or even purposely attempting, to suppress the vote in an election."
Contributing: Todd Spangler, Detroit Free Press; The Associated Press
End of quote
It does not stop there. I.e. Trumps fantasy as to the benefits as to re opening of states will magically get financial reboots to prior activity, economically, got kicked to the curb in GEORGIA
https://www.politico.com/news/2020/05/21/georgia-reopening-coronavirus-jobs-273070
Quote
Reopening reality check: Georgia's jobs aren’t flooding back
A month after easing lockdown restrictions, the state is still seeing a steady stream of unemployment claims, economic data shows.
Georgia began pushing to resume economic activity on April 24. | Ron Harris/AP Photo
05/21/2020 11:13 AM EDT
Georgia’s early move to start easing stay-at-home restrictions nearly a month ago has done little to stem the state’s flood of unemployment claims — illustrating how hard it is to bring jobs back while consumers are still afraid to go outside.
Weekly applications for jobless benefits have remained so elevated that Georgia now leads the country in terms of the proportion of its workforce applying for unemployment assistance. A staggering 40.3 percent of the state's workers — two out of every five — has filed for unemployment insurance payments since the coronavirus pandemic led to widespread shutdowns in mid-March, a POLITICO review of Labor Department data shows.
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Georgia's new jobless claims have been going up and down since the state reopened, rising to 243,000 two weeks ago before dipping to 177,000 last week. The state cited new layoffs in the retail, social assistance and health care industries for the continued high rate of jobless claims that have put it ahead of other states in the proportion of its workforce that has been sidelined.
Georgia, which began pushing to resume economic activity on April 24, presents an early reality check as the White House amps up pressure on governors to lift shutdown orders and President Donald Trump’s economic advisers predict jobless claims will nosedive after the reopening. The state’s persistent unemployment numbers suggest that government restrictions aren’t the only cause of skyrocketing layoffs and furloughs — and that the economy might not fully recover until consumers feel safe.
Georgia's new jobless claims have been going up and down since the state reopened. | John Bazemore/AP Photo
Georgia, one of the last states to impose widespread shutdowns, has loosened restrictions on a broad array of businesses and dine-in restaurants since its stay-at-home order officially expired on April 30. Only bars, nightclubs, theaters, live music venues and amusement parks remain fully shuttered through the end of May.
Some laid-off workers have gone back to jobs since Gov. Brian Kemp first allowed gyms, bowling alleys, hair salons and other businesses to begin limited operations: The number of workers in Georgia remaining on unemployment assistance after an initial application dropped by 11 percent over the past two weeks. But others are still heading to the unemployment line for the first time. Georgia has now seen more than 2 million workers file for unemployment in nine weeks — out of the nearly 39 million who have applied for jobless benefits nationally.
Weekly new applications have gone both up and down in Georgia in the three full weeks of data released since the reopening began. They dipped slightly at first, then rose again before dropping again in the latest week, although at a slower rate than states like Louisiana and Kentucky that have seen similar levels of unemployment claims.
“It’s nothing significant enough to say, ‘Oh, there’s a huge surge,’ — but certainly nothing to signal there’s any return to economic stability or recovery happening right now,” said Alex Camardelle, a senior policy analyst with the nonprofit Georgia Budget and Policy Institute.
End of quote
SUMMARY:
All this defiance of reality lies in the Trump White house very deliberately worshiping the NORMAN Peale fantasy of being able to will ones reality into existence.
ONCE AGAIN
There have been due to panic and sheer incompetence two strains of high grade financial lunacy floated in the WH. One with regards to Chinese held debt, 1.1. trillion USD, and another with regards to Trump thinking he can magically refuse to help states with the Conavirus, unless they abandon vote by mail, in November. The two ideas have at their basic root escapist economic fantasy and in the second matter, felony level voter suppression. The first idiot suggestion is brought up below,whereas we will in the second part delve into Trump's ILLEGAL scheme as to withhold funds to states unless the states kowtow to Trump over sanctuary cities and voting by mail
Here are the facts:
1. Georgian Jobs are NOT coming back. The state population is afraid to go back to work. Unemployment claims are still climbing. IN GEORGIA
2. Rescinding 1.1 Trillion USD of debt to China will destroy the USD purchasing power, leading to unimaginable hardship
3. The threat to withhold funds to States unless states do NOT use voting by mail, is as Kamela Harris stated, a FELONY. It is the same Quid Pro Quid nonsense we saw in Kiev and the Ukraine over Joe Biden
When do we get a break from this NONSENSE ?
Andrew Beckwith, PhD