I have no idea how one goes about "refinancing" the U.S. debt. It isn't owed to banks, after all, who are only only interested in refinancing loans when it's in their interest to do so. Much of the U.S. debt is held by Americans who own government bonds. Is Trump seriously suggesting that we reneg on our promises to bondholders?
I'd guess that he's thinking more about our debt to foreign governments. In that case, he MIGHT be on to something. We have some leverage over Germany and Japan, for instance, in that we provide for much of their national defense. Perhaps that could be wangled into an agreement to "refinance" the debt.
China will be a bigger problem. I think they're the largest foreign holder of U.S. debt, and we don't have as much leverage over them. If we tell them that we're going to pay them less, they may just tell us to F* ourselves and sell it all off.
In any case, the idea of refinanced foreign debt isn't likely to be very appealing to future buyers. It might even spawn a currency crisis since it can be seen as a form of default. That's MY take.
I think Trump is going to win in November, so this could get interesting very soon.
I've concluded, by the way, that Marketwatch is little more than a mouthpiece for the Democratic Party when it comes to political reporting. I take its opinion pieces with a grain of salt.
May 5, 2016
Low-interest-rate backer Trump wants to replace Janet Yellen at the Fed and refinance U.S. debt
By Steve Goldstein
D.C. bureau chief
Marketwatch.com
Presumptive Republican presidential nominee Donald Trump on Thursday positioned himself on the far left of the political spectrum on fiscal issues, coming out for low interest rates, against a strong dollar and a more aggressive managing of U.S. debt.
In a wide-ranging phone conversation with CNBC, Trump said he would replace Federal Reserve Chairwoman Janet Yellen when her term expires in 2018, though he didn’t really offer up any criticism of her.
“I have nothing against Janet Yellen whatsoever, she’s very capable person. But she’s not a Republican,” Trump said. “When her time is up I would most likely replace because of the fact it would be appropriate.
“She is a low interest rate person, she’s always been a low-interest-rate person, and let’s be honest, I’m a low-interest-rate person,” Trump added.
Trump shifted to a discussion of the impact that higher rates has on the dollar, and on the impact a rising dollar has on U.S. business.
“If we raise interest rates and if the dollar starts getting too strong, we’ll have some very major problems.”
“I love the concept of a strong dollar, but when you look at the havoc that a strong dollar causes ... it sounds better to have a strong dollar than it actually is.”
Besides the dollar DXY, +0.46% hurting business, Trump also fretted about the impact on the U.S. debt if rates were to climb.
“I am the king of debt, I love playing with it, but now we’re talking about something very, very fragile,” he said.
One thing Trump advocated that the U.S. Treasury has resisted is a more active management of the debt. The U.S. Treasury hasn’t taken advantage of current low interest rates to issue more longer-term debt.
“I think there are times for us to refinance debt with longer term, we owe so much money,” Trump said.
While at times Trump seemed to link a conversation of refinancing with a situation where “the bubble popped” — at one point even suggesting a buyback of U.S. debt — he also made clear that he wanted to refinance now, to rebuild infrastructure.
When pointed out that the current Republican-led Congress has resisted calls to spend more on infrastructure, Trump said his expertise in that area could change minds.
Elsewhere, Trump said there’s a 40% chance he’ll pick a vice presidential nominee among the 16 other Republicans who ran for president. He said it’s “unlikely” to be Ohio Gov. John Kasich.
The latest RealClearPolitics average of polls has Hillary Clinton leading Trump by a 47.3% to 40.8% margin.
http://www.marketwatch.com/story/low-interest-rate-trump-wants-to-replace-yellen-refinance-us-debt-2016-05-05
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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