Assume a country to be like a company, which has income & expenses. Income source can be tax collections & expense can be government employee salaries, defence sendingтАЩs, social security schemes etc. (2/13)
Is US going to default on its debt?
This ЁЯз╡ will surely help you understand. Do тАШre-tweetтАЩ & help us educated investors (1/13)
Assume a country to be like a company, which has income & expenses. Income source can be tax collections & expense can be government employee salaries, defence sendingтАЩs, social security schemes etc. (2/13)
Similarly US has been borrowing & the total debt today roughly stands at a whooping $28.5T. (3/13)
Ideally a yes but they are not allowed to borrow more! (5/13)
During the 1st world war, US understood if they keep spending money on the war, the debt will be a big liability 4 the future generation & hence they introduced a ceiling on the maximum debt US could take. In 1917, this was capped at $1 Billion
Political parties would pass a legislation to increase the debt limits. From $1B in 1917, the debt ceiling has been moved up multiple times to the current $28.5T (https://t.co/XaLWSSGxN5), which is about to get reached now (7/13)
Political parties (Like India has BJP & congress, US has Democrats & Republicans) need to agree on either suspending the debt ceiling all together or increasing the limit of borrowing by passing legislation like they have been doing in the past (8/13)
May be, but republicans r nt in favor of suspension or тмЖя╕П in the debt ceiling. But this is common, has happened multiple times in the past. Till the legislation is passed, the government shuts down for few days & is back in action as soon as it is passed
A suspension or rise in the debt ceiling can be passed through a process known as budget reconciliation, due to Democrat's majority in the Senate. But some conservative democrats may not support тмЖя╕Пin spending so this may face challenges
Doomsday! US can't borrow more & can default eventually!
-US will not be able to pay salaries to government employees, will not be able to release social security payments, will not be able to pay other liabilities (11/13)
- $ will crash
- Both of the above to have a massive impact on world trade & markets as still 84% of the world trade happens in $ & other countries have huge investments in US treasuries (12/13)
Have earlier written on,
-Sector Analysis - Banking, Paints, Logistic, REIT, InvIT, Sugar, Steel
- Macro
- Debt Markets
- Equity
- Gold
- Personal Finance etc.
You can find them all in the link below https://t.co/UrRt87xaU7 (END)
Here\u2019s a compilation of Personal Finance threads I have written so far. Thank you for motivating me to do it.
— Kirtan A Shah (@KirtanShahCFP) December 13, 2020
Hit the 're-tweet' and help us educated more investors
More from Kirtan A Shah
Should you add more in Equity or redeem right now?
A thread ЁЯз╡to guide retail on why & what should they do at these historic market highs.
Do тАШre-tweetтАЩ and help us educate more retail investors (1/n)
#investing #StockMarket
Some investors feel that markets are trading at a PE of 27 vs 10 years historical average of 20 and a market-cap to GDP of 105 vs historical average of 79 and hence markets look expensive (2/n)
But, in such crazy liquidity driven markets, prices can move much ahead of the fundamentals & suddenly we start hearing commentaries of how the market is pricing in the earnings of FY 22 & 23 to justify the rally
If you r new to fundamentals, ЁЯСЗ can help
Results for Q4 have come out very well but that is also because of the lower base effect of the last year.
Over the last many years, markets have corrected 10-15% each calendar year. Can it happen this year as well? Can very much and that can be a great entry point. Why? (4/n)
There are a lot of over hangs in the near term,
-Crude going up
-$ index moving up
-Inflation moving up
-COVID uncertainties
All of the above are тАУve for markets & liquidity on the other side driving markets up, its impossible to judge the near term movement of the markets (5/n)
A thread ЁЯз╡to guide retail on why & what should they do at these historic market highs.
Do тАШre-tweetтАЩ and help us educate more retail investors (1/n)
#investing #StockMarket
Some investors feel that markets are trading at a PE of 27 vs 10 years historical average of 20 and a market-cap to GDP of 105 vs historical average of 79 and hence markets look expensive (2/n)
But, in such crazy liquidity driven markets, prices can move much ahead of the fundamentals & suddenly we start hearing commentaries of how the market is pricing in the earnings of FY 22 & 23 to justify the rally
If you r new to fundamentals, ЁЯСЗ can help
Market PE at 40 and yet the market is not falling, why? Getting asked this question multiple times. Here's a thread covering \u2018very basic\u2019 premier on valuation for my retail investor friends.
— Kirtan A Shah (@KirtanShahCFP) January 14, 2021
Do hit the \u2018re-tweet\u2019 and help us educate more investors (1/n) pic.twitter.com/8oCkBmmOXY
Results for Q4 have come out very well but that is also because of the lower base effect of the last year.
Over the last many years, markets have corrected 10-15% each calendar year. Can it happen this year as well? Can very much and that can be a great entry point. Why? (4/n)
There are a lot of over hangs in the near term,
-Crude going up
-$ index moving up
-Inflation moving up
-COVID uncertainties
All of the above are тАУve for markets & liquidity on the other side driving markets up, its impossible to judge the near term movement of the markets (5/n)
Last Akshay Tritiya, had written the below thread ЁЯз╡ on which is the best way to buy gold, Physical, Digital, ETF or Sovereign Gold Bond and why?
Do re-tweet and help us educate more retail investors
#investing
Do re-tweet and help us educate more retail investors
#investing
What better day to discuss Gold, isn\u2019t it?
— Kirtan A Shah (@KirtanShahCFP) November 13, 2020
Topic - Physical Gold v/s Digital Gold v/s Gold ETF v/s Sovereign Gold Bond (SGB)
(Thread) \u2013 DO RE-TWEET FOR A LARGER REACH :)
(1/n)
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Krugman is, of course, right about this. BUT, note that universities can do a lot to revitalize declining and rural regions.
See this thing that @lymanstoneky wrote:
And see this thing that I wrote:
And see this book that @JamesFallows wrote:
And see this other thing that I wrote:
One thing I've been noticing about responses to today's column is that many people still don't get how strong the forces behind regional divergence are, and how hard to reverse 1/ https://t.co/Ft2aH1NcQt
— Paul Krugman (@paulkrugman) November 20, 2018
See this thing that @lymanstoneky wrote:
And see this thing that I wrote:
And see this book that @JamesFallows wrote:
And see this other thing that I wrote:
