Topic: Bernanke is Wrong - Default will help the economy. - page 3. (Read 4309 times)
And food would be so expensive that you would work only to eat something.
Last Friday Bernanke was on the hill claiming if we hit the debt ceiling and default on our debt, it will be disaster for the financial markets. Mr. Bernanke also mentioned they buy most of the federal debt. So if we default on the debt, will interest rates rise? Yes, but for a good reason.
After default, congress tells the fed to buy all treasuries at ZERO percent interest. Basically it is Bill Stills dream. Congress would be in complete control of the money supply, not the fed and banks.
What will happen is saving and checking accounts would be higher than the t-bond rate. Basically treasury debt would cease to exist. The fed would not receive the 6% profit on the debt interest they bought with nothing. Thus everyone will have to compete on an equal basis for credit.
After default, congress tells the fed to buy all treasuries at ZERO percent interest. Basically it is Bill Stills dream. Congress would be in complete control of the money supply, not the fed and banks.
What will happen is saving and checking accounts would be higher than the t-bond rate. Basically treasury debt would cease to exist. The fed would not receive the 6% profit on the debt interest they bought with nothing. Thus everyone will have to compete on an equal basis for credit.
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