$253 Billion In Bills Redeemed MTD, $4 Trillion In Total Redemptions YTD, Treasury Down To $7 Billion in Cash

Tyler Durden's picture

And the government keeps on chugging along in its merry Keynesian way (and to those who believe that just because the USD is the reserve currency for the time being and have yet to hear about a country called China, we have one thing to say: just keep buying Treasuries). After burning through $91.1 billion in operating cash in the first 14 days of May, the government is down to just $7.2 billion in cash (ex the $200 billion in the untouchable, for now, SFP account). Not only that, but the little problem of ever increasing rolls in Bills just keeps on reminding about itself, although with $253 billion redeemed so far in May, we don't think little quite captures it. But once again, do not be concerned: the deflationists out there will say that this is all good as the government can just print infinite amounts of reserve pieces of paper (all the while deflation still paradoxically rages, with gold, oil and the Dow all rushing to hit 36,000 first). Back to facts: in the 7 months since the beginning of fiscal 2010, the US has redeemed $3.6 trillion bills, $400 billion notes, and $5 billion bonds. This 150% roll in sub 1 year debt when we are just 7 months into the fiscal year is also nothing to write home about, you may occasionally hear. But at least today's DTS still has not logged the $100 billion or so in yet unsettled debt (and the $120 billion in upcoming issues that will be announced tomorrow). When that happens we will solidly push right past $13 trillion in total debt subject to limit. This, is the last thing that you should not be concerned about. Because worry about unsustainability is merely an artifact of a simplistic Austrian school of economics, which as Greenspan and Bernanke have demonstrated so well, is nothing but a total joke to those sophisticated enough to grasp all the nuances of Keynesianism.

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faustian bargain's picture

Debt limits are so quaint.

mikla's picture


And, wait until people realize "debt limit" is really "debt subject to limit" (allowing us to go ever-higher), that we don't even need a vote to blow past the "debt subject to limit" (it's merely a polite non-binding formality), just like this year's Federal budget is a polite non-binding formality (which we've ALSO decided to not even bother to address with a vote this year).

This is going to be FUN.

Ragnarok's picture

Timmy and Ben must be action junkies.  I can just picture them around a roulette table in Vegas, in tuxedoes with bow ties undone letting the deed to America ride on "00".

etrader's picture

They should dig out & dust of their 1975 hardback addition of Adam Fergusson's

When money dies: The nightmare of the Weimar collapse.

Goods's picture

How do you know they aren't intentionally playing out that script? 

hedgeless_horseman's picture

Or just look to Bloomie today:

German Households Are More Indebted Than Greeks: Chart of Day...


...and way to go Ireland!  If only debt was an Olympic event.

Gwynplaine's picture
Gwynplaine (not verified) etrader May 17, 2010 5:19 PM

That's an excellent book. I read it while the von Mises Institute still had it for free on their website.  They had to take it down at the request of the publisher.   It became too popular I guess.

Mitchman's picture

Let's face it:  There just isn't that much to say.  It's like watching a slow motion video of a car wreck you know is going to happen.  It's not as if you can scream out at one of the drivers "Look out!" and make a difference.

reading's picture

It's actually like watching a slow motion replay of the same wreck over and over again.  Yet each time you still want to scream, but no one is listening.


Apostate's picture

Yup. It's coming time to start taking actions to prepare for the whirlwind. It's been happening for a while, of course, but it's now percolating throughout the wider society.

People who only watch television tend to have short historical memories. Anything that's not being mouthed by the pagan gods on the telescreen appears to be heresy.

Now the heretics are being proven right...

Depressions make generals. Hard times make for stronger men and women. We'll do fine... it's just a question of how to handle all the hopeless ones, the madmen, the killers, the drunks, the addicts, the displaced...

As long as the bastards don't start bombing people randomly, we can make it. If they kept restaurants open in Baghdad, we can keep them open here. We have the intellect, the values, the technology, and the time.

Depression for them. Prosperity for us.

Noah Vail's picture

I'm starting a guillotine manufacturing biz. I foresee soaring demand for these once useful machines.

TexasAggie's picture

That can be very bloody. It was reported that the scaffold was very slippery with blood.  Also, how many before the blade must be sharpened?  I thing a 0.75" to 1" dia hemp rope, stretched by several drops of 200 pounds, should be considered. The scaffold wouold 10 ft off of the ground, a trap door placed in the floor, and then since the door may open and to comply with OSHA, and to keep the guest from breaking their legs, the safety rope would be secured to their neck and wiht the appropriate drop, they will be dead in less than 1 minute, and 30 minutes later, the process can be repeated. low cost, re-useable material, and every 200 or so executions, replace the rope.

Mr. Pierrepoint, the famous English hangman family never had a recedivism case and no complaints.

Ragnarok's picture



But just for piece of mind I would leave the really big cities with historically high unemployment and crime rates.  That values thing you mentioned.  Personally I like Montana and the mid-west, cold winters help keep things in perspective.

ColonelCooper's picture

One thing about the midwest: If you can't get a check from the gubbiment, and you don't like hard work, it ain't the place for you.  FIREWOOD BITCHEZ!!

cossack55's picture

"how to handle all the hopeless ones...." Easy, just keep re-electing them.

Steaming_Wookie_Doo's picture

Between caliber, muzzle velocity and accuracy, you can usually sort out most issues...

Rebel's picture

It is like watching a drunk teenager driving 120 MPH down the wrong side of the interstate at night with no headlights in an ice storm, saying, haven't crashed yet.

Cursive's picture

LOL.  My state senator (Louisiana), Joe McPhearson did this, sans the ice storm, in the 80's on an unopened portion of I-49.  State police nabbed him, which saved his life considering that he was approaching an unfinished span.  Been re-elected ever since and will be term limited later this year.

living on the edge's picture

I'm moving to Greece!!

EscapeKey's picture

Who cares? We all know that deficits don't matter.

Apostate's picture

Dr. James Galbraith... Junior... has it all under control. You can trust him. He works for the University of Texas. His daddy was just as brilliant as he is.

And he has a beard. And we all know that beards mean wisdom. 

Troublehoff's picture


he's a dick..

'japanese lost decade' in their dreams!

Troublehoff's picture

Bernanke has a beard too..

Thank god we have Bernanke to save the world. Imagine if that crazy Greenspan was still jacking the hell out of the currency

..oh wait

etrader's picture

"deficits don't matter."

Seems they're trying their best to go down the G.F Knapp chartalist school of thought.:eek:

neophyte's picture

Of course they don't matter (defecits).After all these are merely "byte to byte" transactions. The computers have been programmed to not have "circuit breakers". Heck one day they too will collpase due the weight of the endless 0000000's.

buzzsaw99's picture

...just keep buying Treasuries).


Well, that's what we was a figurin' on doin'!



lucky 81's picture

i came to this site looking for porn and all i hear is negativity.

Landrew's picture

Reality is neither negative or positive my friend and that is what you get on this site like no other, REALITY! Profit is made from either side of the argument and in some cases using straddles both!

Caviar Emptor's picture


The more they try to fix it, the more broke it gets! Like a machine with rusted bolts and stripped screws.

The Paulson "globally coordinated" Bazooka is still reverberating through the global economy. It had the effect of only temporizing the overall deflationary inevitability of a burst 30-year asset bubble of gargantuan proportions. But it also had an inflationary effect on energy and raw materials. Misallocations are the inevitable consequence of blindly flushing money into markets without letting market forces determine the allocation. 

So we have a financial sector that's still booming (though the engine is just starting to sputter) while the rest of the economy is in the tank. The TBTF's are still alive, quacking like lame ducks all the way to the grave and sucking huge resources as they go. Resources that might have been deployed usefully elsewhere. 

Their thinking is simple. Next time, use a Bazooka armed with a nuke! I think we get stimulus 2.0 by the end of the year, and QE 2.0 whenever the opportunity arises

AR15AU's picture

So AAPL, KO, GOOG, MSFT, IBM, GE, and WMT all have more cash on hand than the UST right now?  LOL


snowball777's picture

An easily correctable situation...

Common_Cents22's picture

Tim and Ben believe in fat finger finance.  Just add a couple zeros on the debt limit.

EscapeKey's picture

This guy taught Timmy and Ben all they know about maths


neophyte's picture

+1000. Awesome. Wish I had learned my math this way!!

Cognitive Dissonance's picture


Well I'm convinced. Who wants to buy my physical Gold? I just found out 7 X 13 = 28

LeBalance's picture

The smarter person is always convinced by the idiot to take a back seat as the idiot is threatened by the smart person and in turn threatens the smart person who would never resort to the violence of the idiot as it is beneath their level of conduct.  Or at least that's what the smart person has been taught in the "school of manners."  Now in the school of "idiots and psychopaths are running the show as smart people are asleep" what is to be done?

neophyte's picture

Perhaps this is a reminder of where we are headed. If you had this note in 1914 you would be very very wealthy.


alexander-delarge's picture

Can someone please answer my rookie question ? here goes = why isn't the govt issuing longer dated treasuries to try and capture low(er) rates for a longer period of time ? Is it b/c no one, no lender will buy this paper if it's too far dated ? Or at least not w/o being paid more for it ?

I have another, please; what's the 'need' from european central banks for US $'s via the Fed swaps ? What investments or transactions are they servicing that requires US$'s ?

Many thanks in advance !

Nolsgrad's picture

would you lend to someone for 20years at 4% knowing inflation was going to be >10% between here and maturity? Nope.

Landrew's picture

Considering the mortgage/auto etc. loan market uses the ten/twenty year monies UST would crush the consumer loan market like a black hole.

EscapeKey's picture

Because it's cheaper to issue shorter term paper, which carry lower interest rates.

One of the way Clinton "fixed" the budget was to shorten the average maturity term.

Sespian's picture

I don't call that a fix, I call it a band-aid.

Unless you're using it in terms of "the fix is in."  Then I agree.

EscapeKey's picture

I agree. Hence the quotation marks.

Sespian's picture

Sorry, didn't take my vitamin B-12 before that reply and was a little grumpy.

Hansel's picture

I don't think this will be a completely satisfying answer to your second question, but the ECB can only reduce the euro money supply to strengthen the euro.  With the fx swaps, the Fed becomes a buyer of euros, thus strengthening the euro vs. the dollar without the ECB having to contract liquidity.  Central banks can't print money to defend their own currencies.

If your looking for a more fundamental reason why the ECB 'needs' dollars, you'll need to look at their counterparties and the ultimate goals of central banks.

SilverIsKing's picture

Does anyone have a view they can share on what they anticipate the sequence of events will be when the SHTF, i.e. failed bond auction, bank holiday, etc etc.

Everyone talks about all hell breaking loose and I've scared enough people with stories of the horrors that will ensue and for which they should be prepared but I haven't heard much from anyone regarding the specific events that might take place.

I know it's all just theoretical.


Apostate's picture

React to the data as it comes in. Have a flashlight, some emergency food, and access to clean water.

Be in good physical shape (this is the most important one).

Be prepared to leave behind the old, the sick, and the deluded.

Never gawk at explosions or gunshots. Stay the hell away from combat. 

RobotTrader's picture

Anytime they need to float bonds, all they have to do is engineer a "Flash Crash" and commodity and stock prices collapse.

Ergo, bond prices rocket and new debt is floated off with ease.

What's the worry???