In what sense is does a rising stock market equal reduction in federal debt?

[IGMOW (I Go My Own Way)Participant 2572]

https://www.thestreet.com/story/14339853/1/trump-ties-stock-market-gains-to-debt-reduction-in-fox-interview.html

Trump said the following on Fox News:
“The country, we took it over at $20 trillion,” Trump began, “As you know the last eight years they borrowed more than it did in the whole history of our country, so they borrowed more than $10 trillion. And yet we’ve picked up $5.2 trillion just in the stock market possibly picked up the whole thing in terms of the first nine months, in terms of value, so you could say in one sense we’re really increasing values and maybe in a sense we’re reducing debt.”

In what sense is rising stock prices equal the U.S Federal debt being smaller?

"I am my own thang. Any questions?" - Davis S Pumpkins.

[bstoffParticipant 4878]

It’s not.
The national debt is more closely tied to our own inflation, which will usually increase if the stock market volume increases.

There are many other guys in this forum that know a lot more than I do.
I’m sure we will here from them on this topic.

[IGMOW (I Go My Own Way)Participant 2572]

bstoff wrote:

It’s not.
The national debt is more closely tied to our own inflation, which will usually increase if the stock market volume increases.

There are many other guys in this forum that know a lot more than I do.
I’m sure we will here from them on this topic.

In what way did what Trump say make any sense then? I would like to know how to take him seriously here, even if I don’t take him literally.

"I am my own thang. Any questions?" - Davis S Pumpkins.

[ghostParticipant]

Trump was wrong on this. @bstoffers is correct.

[narrow road travelerParticipant 1680]

Federal, state, and local government agencies own 70% of the US stock market. Youtuber minivan Jack has a video on the CAFR. The actual ledger for .gov agencies.

So the big fail will hit all aspects of the economy. John Q. Public also benefits the least from bull markets now.

The supreme art of war is to subdue the enemy without fighting. --Sun Tsu

[bstoffParticipant 4878]

IGMOW (I Go My Own Way) wrote:

“The country, we took it over at $20 trillion,” Trump began, “As you know the last eight years they borrowed more than it did in the whole history of our country, so they borrowed more than $10 trillion. And yet we’ve picked up $5.2 trillion just in the stock market possibly picked up the whole thing in terms of the first nine months, in terms of value, so you could say in one sense we’re really increasing values and maybe in a sense we’re reducing debt.”

That’s why he parsed his words the way that he did.
He wasn’t wrong, he was just implying that a strong, or successful economy has the means to reduce it’s debt.
One would presume that, it you had the means to do so, you would reduce your debt.
He didn’t say that having money automatically meant the money would go to pay off debt.

His statement also indicated that it wouldn’t be necessary to increase debt if there was enough money in the economy.

[MarketWatcherParticipant]

ghost wrote:

Trump was wrong on this. @bstoffers is correct

Agreed.

[IGMOW (I Go My Own Way)Participant 2572]

narrow road traveler wrote:

Federal, state, and local government agencies own 70% of the US stock market. Youtuber minivan Jack has a video on the CAFR. The actual ledger for .gov agencies.

So the big fail will hit all aspects of the economy. John Q. Public also benefits the least from bull markets now.

Can you post some links to that being true?

I did find this as an example:
https://www.forbes.com/sites/investor/2013/01/30/how-the-fed-is-helping-to-rig-the-stock-market/#493fe4784da7

If a rising stock market reduces debt, then then government is getting big time into stocks.

"I am my own thang. Any questions?" - Davis S Pumpkins.

[BeerParticipant 11832]

narrow road traveler wrote:

Federal, state, and local government agencies own 70% of the US stock market.

I don’t think this is anywhere near true. Our government doesn’t normally buy stock in private companies. I could think of a few examples, like the GM bailout…but the plan was to eventually sell them back when things straightened out. I guess if you want to stretch it they put money in pension funds that have exposure to the market, but, nowhere near 70% of the market and its going for pension payouts, not to government coffers.

IGMOW (I Go My Own Way) wrote:

In what sense is rising stock prices equal the U.S Federal debt being smaller?

None, directly.

Indirectly though…a rising stock market is an indicator of two things. The first being a strong economy. If the economy is doing well, people are working and making money, companies are profitable and growing, and investors are making profits, then the government is collecting more taxes, so the debt becomes smaller in relation to the GDP and to tax revenues.

The other thing a rising stock market indicates is inflation. Let’s just say next year we double the amount of dollars in circulation but the value of a dollar is 1/2 of what it is now. We aren’t actually any more wealthy as a nation, but our 20T debt gets relatively smaller when its still a 20T debt but you have twice as many dollars and each is worth half as much.

[SandalsParticipant 4254]

Beer wrote:

a rising stock market is an indicator of two things. The first being a strong economy.

Beer wrote:

The other thing a rising stock market indicates is inflation.

A strong economy is an economy with an inelastic money supply (meaning no inflation). Deflation in a rising population is the norm, and is strength, not inflation.

It means Trump has failed as President and he accepts it. See my recent post in the Political Corner: Trump has left the building

[Sky-OParticipant 18949]

Do you want the answer.

(Note: Trump was just roughly summarizing, in a very kindergarten way what he was told behind the scenes by economic advisors)

But, right now I’m going to answer the question. And it is a hard pill to swallow for those with rigid and structured modes of thinking. It breaks down multiple other aspects of what they think they knew about government, money (fiat currency) and debt slavery.

And my qualifications are as follows:

As I report in from a roof top tent system on a Jeep Wrangler at a drop zone that I jumped out of a plane five times at today.

I have a functioning brain. Have studied economic theory extensively and more importantly understand the smoke & mirrors that is central banking and fiat money.

[] When a central bank (Federal Reserve) issues money in any form: credit, currency, bonds,etc – It is in fact debt.

And it needs to be paid back. A deficit is the amount of money that needs to be paid back (with interest). The same government(s) that creates the fiat money (Federal Reserve ‘Note’) owns it.

And it owns the money because use of the money by people within a given geographical political region controlled by the same government that issued the money, requires (by force) that anyone acquiring the money: via income, profits, capital gains, etc – pay taxes on a portion of the money that they are allowed to keep.

The government that issues the money owns it and also owns those that use the money and obtain it via acts that are regulated and taxed.

Those individuals are called taxpayers. And they are products that are assigned inventory numbers (Social Security numbers).

They cannot legally obtain and keep any money owned by the government unless they have paid taxes on it. Assuming an average tax rate of 25% – A single dollar only needs to circulate and result in income, profits, capital gains income four times for the government to get the original dollar back (25% X 4) after it has been in the market.

Now: Continuing – A government’s ability to issue / print / release currency or money is based on it’s ability to get it back. With the primary means being confiscatory taxation.

The same government that prints the money, owns the money and by default: Everything that the money is purchased with. Which includes but is not limited to:

(Battery is dying: Need to plug in – to be continued in Part II)

[Sky-OParticipant 18949]

Continued:

. . .Which includes but is not limited to:

Real Estate
Stocks
Mutual Funds
Savings Accounts
Checking Accounts
Assorted Investments
Etc, etc, etc

And a government that has the power to tax at rates of 10%, 20%, 40% or 60% does in fact have the unbridled power to tax at a rate of 80%, 90% or 99%.

The power to confiscate and tax is not measured in percentages but by sheer power to either tax (confiscate) or not tax. The percentage is irrelevant.

So. Since it has already been established that a government’s ability to issue fiat money is based on it’s ability to pay it back to the central bank and the primary method is taxation:

The next level of issuing fiat money above and beyond what could ever be practically collected via taxes involves the same government that issued the previous money, literally out of thin air and backed by nothing of objective value – To eventually use in it’s calculations to account for about a $20 trillion ‘debt’:

Any and all existing and available (for confiscation) assets that are present. And present in the same economy that the debt was incurred in. All purchased with the same debt based fiat money that originally went into circulation and initially caused the deficit or debt to exist.

All forms of income are legally subject to taxation (by force) just as all existing assets bought with the same fiat money are in fact subject at any point in time to confiscation by the same government that had the power to:

01 – Create money

02 – Tax the users of the money

and ultimately has the power and legal authority to seize and claim every asset (see above list) that was only able to be purchased because the buyer at one point had possession of the fiat money (Federal Reserve notes) that was used to purchase the asset or vehicle they are using to store the money [Real Estate, stocks, mutual funds, bank accounts, etc, etc]

The approximate current US debt is $20 trillion.

The total value of all existing money in any form, all assets and stores of wealth in the US is currently $84 trillion.

The actual debt does not exist but rather is 1/4 of all existing privately owned wealth.

Wealth that is subject to confiscation or seizure at any point by the same government that created the money that made the wealth possible.

[SandalsParticipant 4254]

What Sky-O said.

[RusskyParticipant 13503]

IGMOW is really on the roll with anti-Trump topics today
Sometimes I wonder if he’s some DNC staffer on a mission here

proud carrier of the 'why?' chromosome

[IGMOW (I Go My Own Way)Participant 2572]

Russky wrote:

IGMOW is really on the roll with anti-Trump topics today
Sometimes I wonder if he’s some DNC staffer on a mission here

You call Trump’s own words anti-Trump material. Why do you consider Trump’s own words anti-Trump material? And since when does MGTOW = opinions on different political leaders either way? I go my own way, and have my own opinions. If you don’t like them, contact Keymaster and have him kick me off here. He refused to in the past.

Maybe you idea is to take the picture of Trump, and add your own words to them, to make Trump be and say whatever you like. I would rather that no be, but you can if you like.

"I am my own thang. Any questions?" - Davis S Pumpkins.

[Sky-OParticipant 18949]

It’s all a shell game.

Smoke and mirrors.

Fiat money: An illusion in the US since 1913

The creature from Jeckyl island is real.

[Author]

Posts