Thursday, April 10, 2025

I couldn't get the password to the internet here because my relatives had gone to sleep last night

so, I wrote this in notes last night. But, realize I'm not a stock broker and this is my laymans opinion of what is actually going on.


Bond Ladder debacle because of Trump

Why did Trump begin to create a Bond Catastrophe by dropping the Stock market around the world more than 20% almost everywhere by Tariffs?

Well. From about 2008 to maybe 2012 we had some bond ladders simply because during the Great Depression the safest long term investments were Bonds. From 1930 to 1939 when the Great Depression was happening people who were into Bonds especially electrical bonds and Railroad bonds and the  like did very well and much better than investing in the stock market at that time. It was much more stable.

However, then from 2008 to 2012 the Adjustable Rate Mortgage Collapse that caused the Great Recession all this changed a lot. What happened is that bonds are usually financed mostly by the stocks that especially municipalities use as investments. Then they pay the bonds as they become due to the owners of the bonds.

But, if the stock market drops suddenly too far then the municipalities might go bankrupt like they did during the Great Recession which meant that many municipalities in the U.S. that  use bonds to raise money for things like community colleges and sewage treatment plants and the building of parks and other things could go bankrupt if the Stock market fails because they pay the bond holders mostly with the dividends from their stock investments back for loaning them money to build colleges and universities and sewage treatment plants and other things people need in municipalities around the nation.
 
When the stock market investments of the Municipalities failed then they often went bankrupt and couldn’t cover their loans which is what bonds basically are. (You are loaning money usually to a municipality for interest on that loan).

So, by crashing the stock market Trump was also crashing the bond market and everyone didn’t want to loan money (bonds) to municipalities as bonds anymore so no colleges or other things could be build without these loans with interest called Bonds.

So, as of today this became such a bond market catastrophe that Trump had to stop the tariffs for all countries other than China.

So, now it is perfectly obvious to everyone that we are at war (of some kind) with China but not at war with the rest of the world or the bond market for municipalities especially here in the U.S. or abroad (except for China).

Note: I wrote this tonight:

Since then I studied a little more about this and this is what appears to be happening.

China started selling U.S. Savings bonds simply because they carry more debt of the U.S. Government than any other Country on earth.

So, the interest Rates on the bonds went up but the value of these bonds went down. For some reason this was pretty scary for U.S. economists so they convinced Trump to stop all tarrifs pretty much except for China. Trump didn't realize that China could literally collapse the whole U.S. Savings Bonds Market World Wide by selling all their debt at once that they own in U.S. Savings Bonds.

So, Trump endangered U.S. Debt by doing Tariffs especially on China.

However, what I'm saying here is pretty simplistic. If you want to know more you will have to do more studies on the subject yourself like TALK to an Economics professor FROM A COLLEGE OR UNIVERSITY or something like this to more fully understand all the problems Trump has created IN THE U.S. AND WORLDWIDE:

THAT ARE NOT OVER YET BY THE WAY.

 

No comments:

Post a Comment