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U.S. sovereign default - do not believe your eyes. A series of three.

There was mass speculation about the likelihood of default on sovereign debt of the United States. The series, consisting three blog entries will contain a detailed explanation - why the probability of it negligible.

Do I need this explanation for the "Bedtime stories"?

Lest we discussed the mythic events, false risks, children's fears in financial markets, addressing the real issues, which a great deal.

Argument 6. share of non-residents - holders of sovereign debt the U.S. is 30,3% ( Table 4 ). Investment base of sovereign debt formed mainly within the U.S. (the proportion of residents - 69.7%).

main investor - the state itself. The share of central bank (Fed) federal agencies and non-budgetary funds of the Government in the ownership structure of public debt amounts to 40,4% of its amount, taking into account the investment states and municipalities - 44,3%. The economic content of this or emission (investment Fed), or a deduction from the public debt (the state's investment in their own debts).

It can be naraschena to more than 50% (2001 - 2007 was over 51 - 54%).

Argument 7. normalized (increased to pre-crisis values) Medium term U.S. government debt ( Table 5 ). For the obligations owned by private investors, he has reached almost 5 years.

argument 8. In the long term there may be a script (so far with a small probability), in which the increase in public debt U.S. will lead to a noticeable increase in the use of money issue to cover the deficit and, consequently, to a noticeable increase in inflation and downward pressure on U.S. dollar exchange rate.

Factors of concern are as follows. In recent years there has been a return to the improving capacity of government debt United States, primarily to counter the crisis, 2008 - 2009 years. ( Table 6 ). If in the future rate of increase in the debt burden will be reduced, as has happened earlier, the situation is normalized in the coming years.

impact on the economy of Russia

defaulted on sovereign debt the U.S. would mean the world financial meltdown and a deep crisis in the global economy, which would be raised in the first place, the Russian Federation (scenario 2008 - 2009.) would cause large-scale economic and social disruption.

It defined the leading U.S. role in global economics and finance. Experience in crisis 2007 - 2009 years., Trigger which became U.S. financial markets (mortgages, securitization products, the risks of the banking sector) fully confirms this fact.

Russian Economy Federation in a large-scale highly dependent on global economic growth of world demand for raw materials, the dynamics of the U.S. dollar as world reserve currency on the prices of energy and metals, which are formed in foreign financial markets, access to international capital markets.
forecast in the long term 10 - 15 years preserving U.S. global leadership in reducing the U.S. share of world GDP and advance the growth of other centers of economic (production, domestic demand, consumption of the population). As a consequence, will develop multipolar architecture of global finance, will shape the world monetary system, based on 2 - 3 reserve currencies.

In this situation, the top priority of the Russian Federation is a partnership with all key financial players (the United States - Britain, the euro, Asian Center, the Latin American cluster, first of all, Brazil that international investors view as an analogue of Russia). Goal - diversification of external relations, to benefit from partnerships with all the financial centers, financial equidistance, making it possible to maximize the benefits in the prevention of imbalances in financial vector foreign policy.

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U.S. sovereign default - do not believe your eyes. Series Two.

There was mass speculation the probability of default on sovereign debt of the United States. The series, consisting of three blog entries will contain a detailed explanation - why the probability of this negligible.
Do I need this explanation for the "bedtime stories"?
That we have not discussed the mythical events, false risks to children's fears financial markets, addressing the real issues, which a great deal.

Argument 3. growth of the relative level of sovereign U.S. debt (gross debt) corresponds to a similar trend in other major industrial economies (Table 2). Their saturation with money, debt instruments, associated with the state, is constantly increasing, including through the ability to engage in money centers "excess liquidity" from developing countries (International reserves, export of private capital). This long-term trend is not interrupted by crisis in 2008 - 2009 years.

Argument 4. quantity of pure sovereign U.S. debt (Table 3) is much lower GDP (Table 2). Net debt - this is gross debt minus government deposits in banks and other liquid financial assets owned by the government and which can be converted into money and to repay debt.
debt burden in the U.S. are lower than in other countries "Big Seven" and in the euro area (Table 3).

Argument 5. Sovereign U.S. debt is denominated in national currency - U.S. dollars. Borrowing other currencies are insignificant. There is no scarcity of foreign exchange for repayment in it (the most important cause of defaults on state debt). As a last resort, the state can use the issue of national currency to meet the obligations and avoid default.

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difficult to rescue the word

This difficult word is ordinary - sorry. are people who abuse the wyrażenia.Posługują useful to him to cover against a surprise attack. But sometimes it causes such defense aggression. Shows us a man weak, fearful and overly trying to please. Strong does not like it and expresses it. Opposed to przepraszających, a group that does not schańbi the apology. He is aware that it is wrong to recognize their mistake, sorry-but the words in vain to expect.
False directs the actions of our pride, inflated ego does not allow for humility, especially when a woman deserves an apology. Often turn upside down and pretend to be victims themselves. A funny man, and raised their children, if you can not muster that word-balm.

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U.S. sovereign default - do not believe your eyes. A series of first

There was mass speculation about the likelihood of default on sovereign debt of the United States. The series, consisting of three blog entries will contain a detailed explanation - Why the probability of it negligible.
Do I need this explanation for the "bedtime stories"?
That we have not discussed the mythical events, false risks childish fears in financial markets, addressing the real issues, which a great deal.
Methodological remarks : In the note as alias (in accordance with statistical practice), the terms federal U.S. debt (Federal Debt), the U.S. national debt (Public Debt), the U.S. sovereign debt. Economic content - the debts of the federal government.
estimate of the probability of default. In the medium term the probability of default disparagingly small. Decision about the default was to be unprofessional, irrational, with no economic justification. The script that implements the default - only in the case of a completely irresponsible and unqualified management team managers (the U.S. administration, monetary authorities in the U.S.) if she did not have No political, economic and financial expertise. The situation for the U.S. impossible.
Arguments:
Argument 1 . Level of sovereign U.S. debt until the is "normal" for the leading industrialized countries (G-7) (Table 1).

Argument 2. dimension of sovereign debt of the United States and other leading industrial countries is largely a consequence of their greater "financial depth» (financial depth) - greater saturation money (monetization of the economy), debt-asset finance instruments ("financialization"), in comparison with other countries. The U.S. and other G-7 countries - including 20% \u200b\u200bof world economies that have the highest monetization, most "penetrated" debts.

The higher the level of economic development, greater financial depth of the country, the greater its ability to attract investment in the economy through debt instruments (loans, bonds, treasury bills, etc.). The higher the level of debt (government, corporate, retail). This confirmed by extensive factual basis in studies of financial development, the World Bank.