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Citi On The "Disastrous" USD Implications From A Debt Ceiling Breach

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Tue, 05/31/2011 - 08:00 | 1324763 Dolemite
Tue, 05/31/2011 - 08:00 | 1324768 TooBearish
TooBearish's picture

Debt ceiling breached this week - like a tree falling in the forest - not a sound.....

Tue, 05/31/2011 - 08:04 | 1324771 slaughterer
slaughterer's picture

Of course, the USD will collapse if the debt ceiling is breached...  this is common sense.  But what is going to happen to the EUR in the meantime?

Tue, 05/31/2011 - 08:11 | 1324781 Al Gorerhythm
Al Gorerhythm's picture

like a tree falling in the forest - not a sound.....

like steam rising from Fukushima - not a sound.....

Tue, 05/31/2011 - 08:03 | 1324769 Al Gorerhythm
Al Gorerhythm's picture

Past demands by voters for entitlements from future governments, puts the debt ceiling at $76 trillion, give or take. Now where in the world (literally) will that money come from?

What to do, what to do?


Tue, 05/31/2011 - 08:26 | 1324803 dolly madison
dolly madison's picture

"Past demands by voters for entitlements from future governments"

Not to mention ridiculously high military spending for way too many years.

Tue, 05/31/2011 - 08:05 | 1324770 Catullus
Catullus's picture

Geithner needed a scare-mongering report from Wall Street to support his "Raise the Debt Ceilling or the world will end" tripe. Took a new level with this one.  Even thinking about not raising the debt ceiling could trigger loss of confidence in the US dollar.... Ooops.  I've said too much.  But obviously China would hurt the most, no one else.  There is absolutely no reason to interpret my warning as a reason to sell US or European banking stocks. By the way, this is absolutely not priced in whatsoever and everyone on the planet has been ingoring the massive deficigt the US government is running up and the nearly daily articles coming out everywhere.

Tue, 05/31/2011 - 08:09 | 1324778 GFORCE
GFORCE's picture

Definitely a race to the bottom. Just like the market rallying after Lehman went down, we'll look back on some of these events and wonder why it was brushed aside.


Tue, 05/31/2011 - 08:10 | 1324780 overmedicatedun...
overmedicatedundersexed's picture

think logically and you loose..it's all good news and taking ES higher FRN's are here to stay..buddy can you spare a  pre 1964 dime?

Tue, 05/31/2011 - 08:13 | 1324785 Al Gorerhythm
Al Gorerhythm's picture

For an hours solid labor? Sure.

Tue, 05/31/2011 - 08:21 | 1324793 spanish inquisition
spanish inquisition's picture

The same private owners who own the USD, EURO & YEN central banks will continue to manage them in a range bound area between each other. So, if the debt ceiling is breached, I think they still have a few short term tricks up their sleeves to keep all the currencies viable and in the prescribed ranges.

The question is which one would you sacrifice to save the other 2?

Tue, 05/31/2011 - 08:26 | 1324795 Urban Redneck
Urban Redneck's picture

Stephen Englander is Geithner's little sock puppet.  The issue that Englander is debating is not the significance of breaching the debt ceiling- it is the significance of missing a payment to bondholders.  THE DEBT CEILING HAS ALREADY BEEN BREACHED.  The US government is already under obligation to repay the funds it has been "borrowing" from government pensions to finance operations, which would put it over the Congressionally-Suggested-Borrowing-Limit.  The obligation simply isn't "counted" towards the debt because of the FASB FRAUD that allows public (government) accounting to make bank accounting look honest.  Too silently allow Englander to use deceptive wording like this implies consent to the underlying lie. 

Tue, 05/31/2011 - 08:25 | 1324800 White.Star.Line
White.Star.Line's picture

A hardcore opiate addict who is given keys to the pharmacy, will not worry about silly "ceilings" either.

It is easy to figure out how this is going to end.

Tue, 05/31/2011 - 08:27 | 1324806 bigdumbnugly
bigdumbnugly's picture

Tyler, can you do this in video with a horse race backdrop?  Maybe have a few sway-back nags moping along and falling over every few furlongs?

Tue, 05/31/2011 - 08:29 | 1324815 trav7777
trav7777's picture

it's all a bunch of imaginary confetti...maybe they're afraid the debt above ceiling will be repudiated as illegal lol

Tue, 05/31/2011 - 08:36 | 1324822 mayhem_korner
mayhem_korner's picture

Translation: don't take away my I.V. of Ben's clownbux, or else I'll be found out for the fraud that I am.

Tue, 05/31/2011 - 08:38 | 1324830 grunk
grunk's picture

This may be just a lonely banker's pathetic cry for maid service.

Tue, 05/31/2011 - 08:43 | 1324843 slaughterer
slaughterer's picture

American Maid-raping Psycho, Part 3

Tue, 05/31/2011 - 08:42 | 1324840 pupton
pupton's picture

So what can the little guy do to protect his modest wealth from this impending disaster??? I saw Ron Paul on TV (CNBS) a few minutes ago and he said(because they asked him) that the US has maybe two or three years left before a final collapse. Is hoarding silver the answer? I have some silver and guns and ammo and even a six month supply of food. I'm worried because I have two young kids that if TSHTF they will grow up in a mad max world.

Tue, 05/31/2011 - 09:14 | 1324921 DeltaDawn
DeltaDawn's picture

Teach your children skills, up it to 1 year's of food.

Tue, 05/31/2011 - 09:37 | 1325010 mattwett12
mattwett12's picture

Teach them basic survival skills like making fire from sticks and rocks, hunting, and shelter building.

But seriously, hoarding a metal has significant risks does it not? The "little guy" generally does not have a market to trade precious metals on? (Maybe i'm horribly wrong.)

I think hoarding a 6 month supply of food is a little extreme.

Tue, 05/31/2011 - 10:52 | 1325309 White.Star.Line
White.Star.Line's picture

Having ONLY a six month supply of food on hand is a bigger "significant risk" than metals investment returns.

Tue, 05/31/2011 - 08:48 | 1324859 HEHEHE
HEHEHE's picture

Other than precious metals the USD as a currency has much more going for it in the short to intermediate term than the EUR and JPY.  At some point the PIIGs are going to sink the Euro or those countries will be kicked out of the Euro zone.  The tsunami and resulting damage likely whacked a at least five-10 years off the fuse of Japan's demographic time bomb explosion.  The USD, even as overridden with debt as we are, still has more road to kick the can down.  I'd say give the Euro 3-5 yrs until demise, JPY 5-7,  US 10-12, with several crises during those periods.

In about 10 years we'll be back on the gold standard.  Otherwise there'll likely be a world war.  Also do not believe the Yuan will ever be the world's reserve currency.  Their books are cooked as much as the EUR, JPY, and USD.

Tue, 05/31/2011 - 10:11 | 1325138 TK69
TK69's picture

The sovereign debt is a big joke. It is just a smoke screen to give the illusion of a monetary limit.  In actuality, there is no limit to what they can spend.  It is all artificially created.  There are no actual transactions between sovereign currency conversions, just a book entries at central reserve banks.  And foreign currency, for the most part, stays in it's issuing country because of legal tender laws.  And this means that the US, like the world, is just printing it's own money under the illusion of debt.  It is a ponzi scheme of epic proportions.

Tue, 05/31/2011 - 16:36 | 1326456 HungrySeagull
HungrySeagull's picture

I don't give a shiti what Citi has to say.

The United States has required a bigger and bigger injection since 1T deficiet. The next injection of debt will only poke a dying horse which is past caring about the pain.

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