murica natl debt

Print money

Buy your own debt

Boom

>>1578993
Think of a bond as a way for you to loan money to the government. The government issues bonds for cash. A bond is simply a note promising to pay back the money with interest(the price of borrowing the money).

Generally junk bonds are issued by companies seeking to get some quick cash. They are junk bonds because the companies issuing them are considered high risk borrowers, meaning they might not necessarily pay you back. These bonds generally have higher yields due to being riskier. You can tell a bond is junk generally by how the company or government gets rated by bond rating companies( Standard and Poor's, Moody's, etc.). The US gov. does not currently have a rating qualifying their bonds as junk bonds, but it is possible for a government to issue junk bonds.

Generally, due to the independent nature of the Fed, fiscal and monetary policy often act independent of each other. Fiscal policy is going to be what determines the national debt. They can try whatever tricks they want but at the end of the day the only way to reduce debt is to reduce expenses. The Fed is usually not going to act one way or the other as far as the national debt is concerned, as that is simply not their prerogative.

>>1579037
Also I'd like to point out that bonds are not just issued by the government. Corporations issue bonds. Municipalities issue bonds. All you're doing when you buy bonds is purchasing some organization's debt and providing them with some liquidity, while they will in turn pay you back and then some for your investment.

>>1579040
so a bond is stocks without ownership?

and when china buys bonds its just a circlejerk of money?

>>1579059
>>1579040
wait no i got it. its a loan.

does the gov insure bonds that banks buy then? isnt that what the fed reserve acc are for?

How can one person be so stupid?

>>1579074
bc i never took a business class and jerked off through high school econ?

why dont you ask this to trump who spent his life as a "businessman" and thinks saying " the gdp is 1%" makes sense.

http://www.zerohedge.com/news/2016-04-11/former-imf-chief-economist-admits-japans-doomsday-scenario-now-play

http://www.zerohedge.com/news/2015-06-15/investors-ditch-cash-market-futures-treasury-liquidity-evaporates

http://www.zerohedge.com/news/2016-04-24/why-goldman-expects-japanese-yen-collapse-within-12-months

http://www.zerohedge.com/news/2016-04-20/why-stocks-rebounded-overnight-goldman-expects-boj-double-its-equity-purchases-soon-

http://www.zerohedge.com/news/2016-04-15/bank-japan-already-owns-over-half-all-etfs-it-wants-own-more

http://www.zerohedge.com/news/2016-03-23/japan-goes-full-krugman-plans-un-depositable-non-cash-gift-certificate-money-drop-yo

http://www.zerohedge.com/news/2016-04-17/what-worst-case-outcome-helicopter-money-deutsche-bank-explains

http://www.zerohedge.com/news/2014-12-25/japanese-10y-yield-drops-record-low-2s-sell-subzero-after-boj-indirectly-buys-record

http://www.zerohedge.com/news/2014-06-16/liquidity-becoming-serious-issue-japans-bond-market-death-goes-global

http://www.zerohedge.com/news/2015-03-22/drowning-liquidity-and-none-bond-market-spark-next-financial-crisis

>>1579094
ive seen this site before. its a bunch of crank conspiracies

>>1579100

If I shorted stocks every time zero hedge said the market was going to collapse....

...not only I'd be broke, I'd owe people lots of money.

>>1579100
Oh you where not able to discern past their hype to take in the information about a central banks bond purchases and their effects on the marketplace?

File: Bank_of_Tokyo_quits_as_primary_dealer_for_Japanese_government_bonds_FinancialTimes.png (248KB, 723x1776px) Image search: [Google]

248KB, 723x1776px

>>1579100
It's find. I get it.
Lets try to see if a more reputable source has anything interesting to say.
Pic related is from the Financial Times.

Here is something from bloomberg.
http://www.bloomberg.com/news/articles/2016-08-17/boj-cornered-as-japanese-banks-seen-running-out-of-bonds-to-sell

>>1579100
http://www.wsj.com/articles/the-bank-of-japan-paints-itself-into-a-negative-rate-corner-1467626906

>>1579064
I'm not sure what you mean. A bond is as good as the institution you purchase them from. The Fed will use the bond market to increase or decrease money supply, if the Fed wants more liquidity in the system, they buy up the bonds which puts our cash. That's what quantitative easing was but on a major scale. When they decide they want to raise interest rates and make things less liquid they sell bonds which removes cash from the market.

The US Treasury also issues bonds. These are insured by the fact that you are buying from the US Treasury, which is generally considered a pretty solid institution.

>>1579290
theres this thing called fdic where the gov will have physical money put in an acc to match any amount someone depisits in a bank. this is so if banks go under, people dont lose their money. but the fdic money isnt circulated

the gov took that a step further. they sold some billions of dollars in junk bonds to banks. and they insured that money. except they didnt just match that amount, they insured it with 4.5trill. so there is 4.5trill of physical cash in the fed reserve. if the banks dont see the billions they bought in junk bonds, the gov has to pay out that 4.5tril to banks which wil cause terrible inflation.

just wanna know if we are fucked