Carney, Japan And The EU proved America's Idiot Emperor Has No Clothes

Elbows were indeed up, it seems.

  • Voroxpete@sh.itjust.worksEnglish
    48·
    26 days ago

    Interesting theory. Total absence of proof.

    Does the theory fit the available facts? Yes.

    Do the available facts prove the theory? Absolutely not.

    • Chonnawonga@sh.itjust.worksEnglish
      13·
      26 days ago

      Also the tariffs against Canada are still in place, leaving Canada in a relatively isolated position compared to a couple of days ago. That doesn’t really fit the narrative.

  • Snowstorm@lemmy.caEnglish
    38·
    26 days ago

    Attributing all the merit to Carney in a time of election seems a bit… optimistic? No doubt he was an insider on this brilliant strategy but giving him the unshared paternity is a bit of a stretch.

    Whoever came up with this first isn’t ultimately important : I will gladly vote for someone smart enough to understand the strategy and with the connections to push it and see it implemented. No other PM candidate can have me sleep at night with the trust that we try to protect our interest with the best strategy available for our limited ressources.

    Also the “if the US won’t lead the world, we will” comment gave such a hopeful vibe, it reminded me of Obama or Jack Layton campaign style.

  • gothic_lemons@lemmy.worldEnglish
    34·
    26 days ago

    A sound plan. An effective strategy that would give any president pause. However, they overlooked a few key details. While they were playing a master class in chess, Trump was at a checkers board playing roulette and shitting himself. By playing roulette I mean stock manipulation and insider trading while he sucked on checkers pieces and shat himself.

    • Sabin10@lemmy.worldEnglish
      15·
      26 days ago

      To be fair, Carney is an economist with a doctorate, the former governor of the bank of England and the bank of Canada. He’s up against a “businessman” who couldn’t run a casino profitably.

    • InverseParallax@lemmy.worldEnglish
      5·
      26 days ago

      I trust capital a lot more than I trust his base.

      I’m brown, I got to run away from his baseball bat wielding base.

      Capital can be reasoned with, inbred rednecks can’t.

  • Noxy@pawb.socialEnglish
    1·
    26 days ago

    I don’t understand how prices drop and interest rates rise as a consequence of nations selling bonds. Wouldn’t prices only matter to the buyers and sellers of the bonds? And why would interest rates change?

    In any case, if it gets the world to trust the USA much less, as we sadly very much deserve, I’m all for that.

    • shawn1122@lemm.eeEnglish
      4·
      26 days ago

      Bonds offer fixed interest.

      Let’s say a $50 bond offers $5 dollar yield at maturity (10%).

      If those that currently own bonds sell en masse, the bond becomes less valuable (let’s say $40) but the yield is still $5.

      Now the interest rate is 5/40 = 12.5%.

      The 30 year treasury bond interest rate is closely tied to mortgage rates.

      A higher bond interest rate makes it more expensive for businesses to borrow money.

      If other countries sell off US bonds (which are purchased in US dollars), they flood the market with US dollars which ultimately diminishes the dollars value.

      Trump and his ilk like to act like the US subsidizes many of its allies when that is very clearly an oversimplification. Many of the US’s allies own US debt (in the form of bonds) because the US is an extremely reliable borrower. If those countries decided the US is not reliable enough to lend money to anymore, it would be extremely problematic for the American economy.

      Tl; Dr: Canada, Japan and the EU could twist American home buyers and businesses by the balls by selling off bonds and, if they took it far enough, even devalue the US dollar. America spends a shit ton of borrowed money from its allies and even China.

      • Noxy@pawb.socialEnglish
        1·
        25 days ago

        I still don’t understand why interest changes if it’s a fixed interest rate. I get that a bond could be sold for a lower price than initial purchase price, but does the interest rate only apply to the most recent sale price of the bond?

        • shawn1122@lemm.eeEnglish
          3·
          24 days ago

          The interest rate isn’t fixed, the bond yield (in dollars) is fixed.

          Its presented as a percentage interest rate which can be variable.

          For example let’s say you have a $1000 bond that pays a $50 dollar yield at maturity. The rate would be 5% (50/1000).

          If the market is flooded with bonds, their value would decrease due to increased supply. Now that bond may only be worth $900 but still pays a fixed yield of $50. The interest you get paid in this scenario is now 900/50 = 5.5%

          This is great if you are a lender. When you buy bonds you are essentially lending money the government and now your yield will be higher.

          But many ordinary people are more often in the position of borrower. The interest rate for mortgages, car loans etc. are based off of bond rates. So if that rates goes up, many major purchases become more expensive over time. Small businesses are also heavily impacted by increased borrowing costs.

          Generally, higher bond rates represent decreased confidence in a government entity’s fiscal responsibility. When US federal bonds are sold off collectively, the rate goes up, signalling that investors have lost faith in the US government reliably paying back its debts.