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A HERETIC I AM

(24,908 posts)

9. That message is already out there and it WON'T make Wall Street "happy".

Reply to BlueCaliDem (Reply #6)

Sun Oct 6, 2013, 04:03 PM

Oct 2013

As long as the Treasury can continue to make timely coupon payments and full redemptions on bonds that are maturing, it will not affect the credit rating of Treasury bonds.

They would be two separate things.

Nobody likes a selloff, (OK, Short sellers do) and if we default on a bond or series, then the DOW and the S & P will plummet.

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Best solution I have seen so far to avoid default if the debt ceiling is not raised. [View all] Nye Bevan Oct 2013 OP

Yard Sale! Roland99 Oct 2013 #1

Wouldn't that still devalue the current debt because it caps the interest? landolfi Oct 2013 #2

Callable, face value, zero coupon bearer bonds. A HERETIC I AM Oct 2013 #3

But, it changes the original contract to less favorable terms, and thus devalues it landolfi Oct 2013 #5

Read the OP again. A HERETIC I AM Oct 2013 #7

I did read it, still default IMNSHO landolfi Oct 2013 #14

The effect of this would likely be similar to an actual default. PoliticAverse Oct 2013 #4

It would send the message that the United States is a credit risk BlueCaliDem Oct 2013 #6

That message is already out there and it WON'T make Wall Street "happy". A HERETIC I AM Oct 2013 #9

Wall Street *will* be happy to get their money AND to put this president on the path to impeachment. BlueCaliDem Oct 2013 #13

There's also the use of bonds that pay an interest, but never promise to repay any of the principal BelgianMadCow Oct 2013 #8

THAT makes perfect sense, Benton D Struckcheon Oct 2013 #10

Why would an investor want to buy that? DCBob Oct 2013 #11

An investor would convert a sum he had now into a perpetual stream BelgianMadCow Oct 2013 #12

No it wouldn't.... A HERETIC I AM Oct 2013 #16

I can follow why the interest could be lower. But these consols aren't callable BelgianMadCow Oct 2013 #17

Any security of this type can have a call provision at the outset. n/t A HERETIC I AM Oct 2013 #18

OK, but then the consol would count against the debt limit, so such a provision would then BelgianMadCow Oct 2013 #19

LOL...I think we're getting above my pay grade! A HERETIC I AM Oct 2013 #20

Well, I didn't find any contemporary examples of consols, but BelgianMadCow Oct 2013 #21

Re: your last sentence: Exactly. A HERETIC I AM Oct 2013 #22

What would stop a future president from issuing scrip to fund things congressrefuses to fund Nuclear Unicorn Oct 2013 #15