Jonathan Wagner's  Instablog

Jonathan Wagner
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Coder, with a passion for the stock market. I Have been interested in the stock market since I was 12 and I have dabbled in experimental technical analysis methods such as non-time correlated fractal market analysis. I am the creator of the #1 drawing on maps application the web called... More
  • The Default Scam 0 comments
    Oct 16, 2013 8:43 AM | about stocks: QQQ, SPY

    If you're not aware the USA is ready to rip apart at the seams if the government can't manage to raise the debt limit. Checks will not be sent out, countries will not be paid, and the entire USA economy is going to be brought to its knees. The only problems with this is that this is not what is going to happen.

    Despite the doom and gloom being expressed by the president and pretty much every news outlet, the reality is that the USA government will never default even if they don't manage to raise the debt limit in time. What is going on right now is a political circus that has no basis in reality. So let me explain using Obama's own type of metaphors.

    You know what happens when you miss a mortgage payment? You still have to pay it. It doesn't actually matter when the government raises the debt limit because whenever it does it will retroactively pay any missed payments in the same way that someone who misses a mortgage payment still has to make payments. They have already done it with government workers and there is no reason the government won't do it for everything else.

    Now some will make the claim that the there will be massive economic fallout and that people will trust the USA less yada yada, this is doubtful since there is nothing stopping the power of the money printing presses.

    Sure printing large amounts of money has negative effects but these effects don't bubble down from the government, they bubble up from things like the average Joe getting hit with cost of living increases.

    The default fears are a scam, the USA government will never default; it can print money. In some ways this money printing is a form of default through inflation but this has been going on for years. The idea that the government not raising the debt limit in time will have any worse of an effect than what has already been going on for years is a flat out joke.

    Do not be fooled into believing that if the deadline is not reached it is the beginning of the end because you might find yourself holding the bag as more printed money holds up the market. If there is one thing you never want to bet against, it's the government.

    Stocks: QQQ, SPY
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