The way I understand it, Donald Trump keeps his bankers in a bit of a predicament. He owes them so much money that they can't afford to pull the plug on him. All his properties are supposedly mortgaged up to their hilts and, although he usually and continually makes payments on these mortgages, he, often enough, refinances them for more working capital. And occasionally, he let's one of these puppies be euthanized (e.g., the Taj Mahal in Atlantic City) to keep his creditors fearful. (See:
Legal Zoom and
Daily News.) He clearly has a very intimidating negotiating style based upon the leverage of his leverage. But mostly his total indebtedness just keeps growing ... and growing ... and growing. Effectively, he seems to maintain his lavish life style off of the reverse-vigorish of these banking bets.
Does this all not sound a lot like how the United States Treasury and our Federal Reserve Bank operate? Only, whereas The Donald does not seem to have any limit to his hubris (and borrowing), The Barry does have an increasingly skeptical Congress which thinks that maybe enough indebtedness is enough. Yesterday, the United States's debt limit was reached and Congress refused to increase it. And no matter how much gorilla dust Timothy Geithner and Ben Bernanke throw up about the calamity that will eventually ensue from this event, I think that the United States's bankers here and around the world may just be a little more disciplined than Mr. Trump's. (See
PIMCO Selling)
