Bankrupt? US bnkrpt? 80Trillion liabilities: 105 T assets-includes loans

Our assets total 105 Trillion, but line 2O says our liabilities are 8O Trillion.

Does that mean we own 25 Trillion in factories, mines etc... and have gotten loans from China etc, for 8O Trillion "on our signature", that is... based on their confidence that we WILL generate payback money in the future?

If so, is that condition.. owing far more than we have in physical assets... called BANKRUPTCY?

Is america bankrupt?

How do you interpret the page giving US's
total wealth, bottom line, and the "liabilities" figure, from line 21 or so below...

http://www.federalreserve.gov/releases/z1/current/accessible/l5.htm

... its all the fault of the Clenis

Thank you, George.

I expect George to default on Treasury obligations. That has always been my prediction for his second term.

what is your understanding of bankruptcy?

repaid. So i hold the loan cash, but must someday repay that loan cash. If they call the loans due tonight, I return the loan cash.

THen, i only have 25 Trillion, my original physical assets... factories, mines, farms, et.

That 25 is my solid reliable wealth, yes? The loan cash is a bit less reliable, yes?

I am a newbie to "high finance" LOL. Love that term. Does wealth really include loan cash {from China, EU, etc}? If the US were to fall on hard times, wouldnt China et, call loans due fast, to be sure of getting their money back before we got so messed up, we could not repay? Eh?

so given $105T in assets and $80T in liabilities, there is $25T net assets free and clear. this is not bankruptcy.

think of borrowing for a house. i start off with $20,000, i use it to buy a $200,000 house. obviously i must borrow $180,000 to do so.

before, my assets are $20,000, my liabilities $0.
after, my assets are $200,000 (house), my liabilities are $180,000 (mortgage). my new worth is still $20,000.

true, i am more "leveraged" in that a small percentage change in the value of my assets has a much largere effect on my new worth. for more homeowners, this is not a problem, and in fact is generally desireable, provided you didn't buy in an area that's going to lose value steadily.

but it's hardly a bankruptcy situation.

Most of the bottm line at that link page, is really just borrowed money, right?

Three fourths of our "wealth" is loans, right? In the form of Treasury bills sold to ..um.. foreign nations' central banks?
know the percent sold to americans and to foreigners? Could our gov "forgive" such debt to americans, cancelling it?

The only reliable wealth in a storm, would be the 25 T, right? We do not have 1O5 T in factories and farms, right?

That page MIGHT be read to say we have 1O5 in physical assets, and also some liabilities that are not counted as assets. Calling a liability an asset seems something that one person might do, whilst another might not.


For all newbies i ask this,
OSCAR

in the example i gave, i borrowed $180,000 but i didn't simply keep that cash as cash. i plowed it into a physical asset -- my house.

so the $105T is probably nearly all physical assets. we owe $80T. if our debts were "called" (btw, most of this debt is not callable, though it could be not rolled over as it matures) we would be forced to sell off much of these physical assets, just as if my bank were to "call" my mortgage, i would have to sell my house. BUT, my house is worth more than enough to cover my mortgage, so i'd still have money left over. i just wouldn't own my house anymore, i'd have to rent.


as a practical matter, though, bankruptcy is determined more on a cashflow basis than a liquidation basis. what i mean is, as long as you can make your interest payments on your debts, you're ok. in america's case, its physical assets are highly productive and easily pay the interest on its debt.

furthermore, world economies have a self-correcting feature in fluctuating exchange rates. the weakening dollar and inflation make world debt more affordable. the reason is that the debt is in a fixed amount of dollars, but a weakening dollar and inflation make dollars easier to come by.

It is a video lecture (about an hour) but the best material is early on.

Bottom line: USA is bankrupt

http://mitworld.mit.edu/video/202/

can u summarize in case the audio does not work? glitches, glitches, ...

The US can monitarize the debt, IE print more money to pay off the debt.
Weimar Germany did it, after all, and look how well it worked for them!

a fellow took a wheelbarrow of cash to buy groceries, he left it on the sidewalk for a moment, and when he returned, the cash was still there, but the wheelbarrow was gone.

But that can't happen here, because our money is green, not sissy pink and blue.

The only thing that seems like it's of much value is net assets - liabilities. One part of corporate America can loan another part money increasing the both assets and liabilities, but not necessarily having an effect on the economy.

What might be more useful is if we could somehow look at the US as one system and count its assets and liabilities across the system's borders. How much do we own of their stuff? How much do they own of ours? How much do we owe them net? I'm not sure if counting something like this is possible.