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The Debt ceiling is approaching, defaulting can wipe out $15 Trillion dollars of wealth for households and lose 6 million jobs

i would say that this has already happened and the whole thingy is being propped up. the senselessness of it. .25 cent wage increase doesn't pan out with a $50-$75 rent increase and other misc. "economic" increases. we were all aware of a supposed economic science but recently we are finding that it's manipulated so badly that the science part is and has only been a facade with those who most benefit from it believing and falsely spewing that everything is all right. today we are being forced to return to unsustainable waged jobs
 
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Nobody Really Knows How the Economy Works. A Fed Paper Is the Latest Sign.

Many experts are rethinking longstanding core ideas, including the importance of inflation expectations.
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But the inability of people to pay for things because of the Fed's unwillingness to loosen credit caused people to lose faith in the value of their claims on future wealth, and that caused an actual reduction in productivity over time.
It wasn't the claims on future wealth (i.e. money) that they lost faith in, it was their job security.
You see the stock market crash so you tighten your belt in anticipation of potentially losing your job. So does everyone else. So people don't buy things which means companies don't need workers to make them and people lose their jobs. Then people who lose their jobs don't spend money, and people see people losing their jobs and tighten their belts even more for fear they're next, and you get a deflationary spiral.
You can lay this on the Fed for not providing enough liquidity, but the real reason this happens is that the Fed is the only one allowed to do it.
Suppose you're a candlemaker in the US during a deflationary spiral. Nobody will give you dollars for your candles. However, someone might give you euros or pesos or something like that. But now you have to pay your rent. If you can pay it in pesos, you're all set. If you can't, you have to buy dollars with pesos, which bids up the price of dollars and accelerates the deflationary spiral.
The problem comes when the government privileges its own currency. If you can't easily get a bank account denominated in another currency without converting it to dollars, if you can't pay your taxes in pesos even when that was what you received from the buyer, then people still have to convert the other currency into dollars and continue the deflationary spiral.
Whereas without that government restriction, a shortage of dollars would be resolved by using something more available as the medium of exchange.
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dzdt 3 days ago [–]
At the time of the great depression, every important currency was on a gold standard. So in an important sense there was only one currency: gold. The impossibility of increasing currency supply because of the gold standard is recognized as a major contributor to the depression.
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https://news.ycombinator.com/vote?id=28753722&how=up&goto=item?id=28736145
 AnthonyMouse 3 days ago [–]
Even when countries were on the gold standard, they still had fractional reserve banking. If a troy ounce of gold was $100 , the bank had one ounce of gold and three separate people had a $100 bill, any one of them could go to the bank and get the gold, as long as not all of them did.
It's also possible to have a gold standard without holding your reserves in gold. The bank could hold them in anything -- other metals, bonds, real estate -- and then exchange that thing for gold in the market in the event that the customer comes for it, which they only do if they lack confidence that the bank will be able to make good, which doesn't happen when the bank is holding valuable assets. And then you can create as much "money" as you need by, for example, making mortgage loans backed by real estate.
You can still get into trouble there if the value of the assets declines (see 2008 housing crash), but that's a different kind of problem than the original one with separate methods to avoid it.
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https://news.ycombinator.com/vote?id=28742173&how=up&goto=item?id=28736145
 JanisL 4 days ago [–]
Start from first principles and look at the economic data directly (understanding game theory is a crucial piece of this). Make sure to ignore the narratives as these tend to obscure the understanding of the fundamentals (since most people pushing various narratives about the market are driven by vested interests rather than educational interests).

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what you guys think about this?
 
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I have 10 properties, and I also manage four for my brother. Everything was working fine until March 2020, when the pandemic hit us, and the eviction moratorium started taking place, and tenants started defaulting.
The crucial thing was the right to access justice. I’ve changed the term. We are “landlords” no more; this is a useless British-dictionary word. I neither have the land, nor am I the lord. What the crap is that? You call me the “land” and the “lord,” and then snatch my right to go to a court in a genuine case where there is no covid-related issue? I am a housing provider.

I had to sell a house because I was not getting the funds that I should have to keep my business running. When a tenant defaults, I still have to pay the homeowners’ association. I still have to pay the property taxes. I still have to pay the repairs. So where the hell do I get the money? One tenant who defaults means income from the other properties goes toward paying this. I’m at my wit’s end. People do not understand.
And the emotional pressure: Instead of having a normal life, I have been putting a lot more time into doing repairs, painting, things like that. I keep fixing the flushing part of the toilet bowls because everyone is at home. I had to replace an air conditioner, and it cost me $4,000.
Once the Illinois eviction moratorium is done [on Sunday], then I have to talk to my tenants about raising the rent. Property taxes are going up. Assessments are increasing. I’m scared to go to those tenants where I’m not on good terms. If you go with an increase in rent, no one would say that is good news.
I am absolutely concerned about the end of federal employment benefits, because if you withdraw any support system, that is going to hit the housing providers harder. And if someone is already struggling, your brain is saying, “Don’t go and put more pressure on them.”
I am learning. I am asking for co-signers. I’m much pickier. In the past, with potential tenants, I would say, “Someone has a 450 or 500 credit score? I can take that risk.” But now, 650 minimum. This is bad for tenants with low scores because, really, no one will give them a place.
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