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It's Official: DTS Discloses Total Debt Hit Ceiling Yesterday; Government Draws On $14.3 Billion From Retirement Funds

Tyler Durden's picture




 

While it won't be a surprise to anyone at this point, seeing it in black on white is about as startling as hearing that one's credit card has been denied. Yesterday, following the settlement of all of last week's auctions, total debt held by the public increased by$51.4 billion, just as we had predicted, bringing the total to $9.717694 trillion. And with the total debt subject to the ceiling maxed out legally by $14.294, Tim Geithner reported a total of $14,293,975 MM, $25 million away from the ceiling. What was the plug? Why "Intragovernment Holdings" of course, which declined by $14.3 billion. As Tim Geithner warned yesterday this is now money held in retirement trust funds, which is now being directly sacrificed in order to keep the ceiling from breach: "I will
be unable to invest fully the portion of the Civil Service Retirement
and Disability Fund (“CSRDF”) not immediately required to pay
beneficiaries. In addition, I am notifying you, as required under 5 U.S.C. §
8438(h)(2), of my determination that, by reason of the statutory debt
limit, I will be unable to invest fully the Government Securities
Investment Fund (“G Fund”) of the Federal Employees’ Retirement System
in interest-bearing securities of the United States.
" And as expected, once the debt ceiling is raised, the accrued shortfall will be filled, meaning upon a debt ceiling hike, which will come some time in July, total debt will explode higher, surging by about $300 billion in a few days.

From today's DTS:

Most importantly, as of close Monday, the Treasury had $127.5 billion in cash which will not be replenished through any more net debt offerings. It better last a long time.

 

 

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Tue, 05/17/2011 - 16:17 | 1284464 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Looting in broad daylight... and what do the citizenry do? Same as always, nothing.

Also, why not sell some of the gold in fort knox? After all, if you aren't going to sell your gold when in times of need like these, when will you...? There is some gold to sell, right?

Tue, 05/17/2011 - 16:21 | 1284482 Zon
Zon's picture

And what have you done?

Tue, 05/17/2011 - 16:20 | 1284488 redpill
redpill's picture

Who is John Galt?

Tue, 05/17/2011 - 16:49 | 1284609 LowProfile
LowProfile's picture

I heard he shrugged and left town...

Tue, 05/17/2011 - 17:14 | 1284701 camaro68ss
camaro68ss's picture

Obama- “how do we hide the raiding of government pensions?”

Turbo Timmy- “ 24/7 marathon of American idle. That should do it!”

Obama- "Sounds good, o one thing, the circle jerk party is at 6 tonight dont miss it"

Turbo timmy- "Come on Mr O, you know i would never miss that"

Tue, 05/17/2011 - 18:03 | 1284917 solgundy
solgundy's picture

at least social security money is safe....they stole that years ago

Tue, 05/17/2011 - 18:58 | 1285040 Zero Govt
Zero Govt's picture

the parasitical scum will rob, rape and vandalise everything good in the country not tied down from behind their desks in Washington

...401k's next

Thu, 05/19/2011 - 12:48 | 1292043 dracos_ghost
dracos_ghost's picture

...401k's next

 

Yuppers. This is the first shot across the bow.

These guys have been structuring a de facto takeover of retirement accounts for a couple of years now:

http://www.thenewamerican.com/usnews/politics/3478-obama-administration-...

Wed, 05/18/2011 - 06:40 | 1286375 Urban Redneck
Urban Redneck's picture

Galt reread the Art of War and relocated to a more defensible position than a gulch.

Tue, 05/17/2011 - 16:26 | 1284512 malusDiaz
malusDiaz's picture

Shoveled 25+10 yards of Loam / Dirt!

Raised a Green house

Raised Chickens

14 Raised beds

90' long row,

24' long row,

 

EAT IT!

Tue, 05/17/2011 - 16:49 | 1284602 DaveyJones
DaveyJones's picture

and barter goods and services

Tue, 05/17/2011 - 16:50 | 1284615 LowProfile
LowProfile's picture

Make sure you reserve a portion to go to seed, so you can collect them.  Don't count on Burpee being able to ship what you need.

Tue, 05/17/2011 - 16:59 | 1284661 DaveyJones
DaveyJones's picture

so true, the colder and drier the better. Add to it, lots of perennial edibles. Plants For a Future is a nice site and Eric T's Perennial Vegetable book. The Siberian Pea Tree looks like a reliable survival source of protein and grows like a weed. Unlike nut trees, you'll have your protein source almost immediately. Although it's an annual, Quinoa is an incredible complete protein source and also grows easily producing tons of seed. It's nice to look at as well. One way to make sure you get b-12 if your diet is restricted to plants is to make sure your own fertilizer includes animal manure (like chicken waste and straw in their pen thrown into the compost bin. Good stuff 

Tue, 05/17/2011 - 18:46 | 1285052 the rookie cynic
the rookie cynic's picture

Pea shrubs are also good forage for backyard chickens, even long into the winter. They peck the shriveled peas right out of the bushes. Also nitrogen fixing and has nice yellow flowers for part of the year.

Hazelnuts are another fast growing protein producer.

 

Tue, 05/17/2011 - 20:16 | 1285323 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Ron Paul says to sell the gold in Fort Knox?  Is he bluffing because he knows there is nothing in there?  What is his deal?

http://www.nysun.com/national/selling-gold-at-fort-knox-emerges-as-next-...

Tue, 05/17/2011 - 20:37 | 1285367 tmosley
tmosley's picture

Someone with his level of knowledge should realize that selling the gold out of Ft. Knox would literally kill the country.  It seems to me that this means that he thinks the US can no longer be saved, and must be euthanized so it can be reborn from the ashes.

Can't say I disagree.

Tue, 05/17/2011 - 20:36 | 1285374 sullymandias
sullymandias's picture

Ron Paul now confirmed as a shill. A neoconservative dressed in libertarian clothing.

Dr. Paul told the Sun today that he reckoned the sale of gold reserves would be “a good and moral decision. An individual would have to do the same.”

That depends. If an individual was born into wage slavery, couldn't even survive without taking on a debt, and then found a way to squeek out of the debt while maintaining some hidden wealth, well then, good for her!

For us "citizens", it is an entirely different matter. The debt is a fraud, outright theft perpetrated upon the american people, as well as upon the people and institutions that bought the debt. To suggest that the people, or the even the current government, was under a moral obligation to pay back such a debt, is simply outrageous. Such a suggestion could only be made out of stupidity and ignorance, or in the service of the oligarchs who have defrauded us.

Wed, 05/18/2011 - 02:20 | 1286207 efiniti
efiniti's picture

Guess what buddy?  The gold at fort knox is NOT your gold!  Its NOT the people's gold.  It never was.  Its the governments gold.  The one that made all these promises it could not keep and sold itself into debt it could not pay back.  

 

Well now the bills are due and the people are collecting.  Karma's a bitch, ain't it?

Wed, 05/18/2011 - 21:15 | 1289788 sullymandias
sullymandias's picture

Hey "buddy", don't be an idiot. Eventually we are going to have to move to a metals-based currency. The more gold the government has at the time, the stronger that new currency would be. While should we sell the gold now to pay off a debt that we are going to have to default on anyway? Why not default and keep the gold too?

Tue, 05/17/2011 - 20:41 | 1285386 sullymandias
sullymandias's picture

Libertarians are fucks for pretending/believing that the Federal debt is legitimate.

Tue, 05/17/2011 - 20:58 | 1285444 iLoveMisesToPieces
iLoveMisesToPieces's picture

I'm sure this is just a way to force a backdoor audit.

Wed, 05/18/2011 - 00:11 | 1286019 jaffi
jaffi's picture

From a sound money perspective, this makes perfect sense. What better way to support sound money than for the government to sell its gold back to the people? Not only that, but it is one of the most moral things that the government could do to pay its debts. Let me ask, what is more moral, to sell the gold back to the people in order to pay the government debt, or to inflate the currency in order to pay the debt? I think that it’s a pretty easy decision, and I respect Ron Paul for staying completely consistent in his principles on this matter.

Plus, we get to find out if the gold is actually there.

It is not as if the government holding the gold does anything to help you or me, or that it confers any sort of ownership to you or me (collective ownership is a theoretical impossibility).  Plus, if the government were to sell the gold, it would help people (like you or me) buy up some more if the price dips due to increased supply in the market.  Why would I want the government to have the gold if I can buy it from them?

Tue, 05/17/2011 - 19:49 | 1285253 Things that go bump
Things that go bump's picture

Some modern hybrids don't produce seeds or produce terminator seeds that don't germinate.  

Tue, 05/17/2011 - 16:51 | 1284636 tmosley
tmosley's picture

Excellent.

Tue, 05/17/2011 - 18:17 | 1284962 mynhair
mynhair's picture

Stay away from trying jalapeno peppers - total aphid attractors.

And weird fungi, though it might be downy mold from the garlic.

 

Tue, 05/17/2011 - 16:29 | 1284524 Brian
Brian's picture

Here is my BIG question on this.  What happens right now if there is a bank run?

Can the FDIC now cover a large-scale banking crisis while the feds are at the debt ceiling?

Since we all know the banks are insolvent - the majors at least, BofA and the like, shouldn't everyone grab their money right now?

I think I'm getting the remaining cash (I still have some USD, it's not all in gold/CAD yet) and take it out before other people get the idea that a bank crisis will actually mean the REAL loss of their cash this time around.

--Brian

Tue, 05/17/2011 - 16:42 | 1284549 hedgeless_horseman
hedgeless_horseman's picture

Cash and bank runs are the past. 

Debt and defaults are the present.

Barter and theft are, once again, the future.

Tue, 05/17/2011 - 16:40 | 1284572 Careless Whisper
Careless Whisper's picture

The SOLUTION to hitting the debt ceiling is quite simple. The Federal Reserve Bank can simply forgive $1 Trillion worth of Treasuries that it owns.  What difference would it make? It's just one big circle.

Tue, 05/17/2011 - 16:54 | 1284651 NotApplicable
NotApplicable's picture

It would publically expose the facade in such a way that even the bozos on CNBS couldn't ignore while retaining any credibility amongst the herd.

It may happen eventually, but it's an idea whose time has yet to come.

Tue, 05/17/2011 - 17:15 | 1284737 Tyler Durden
Tyler Durden's picture

You do realize that the Fed has a balance sheet in which every asset (Treasury) is matched against a liability (USD or excess reserve). So does that mean we take out $1.4 trillion of the $800 billion in dollars out of circulation and classify them worthless?

Tue, 05/17/2011 - 17:42 | 1284836 RichardENixon
RichardENixon's picture

They'll be worthless soon anyway, so why not?

Tue, 05/17/2011 - 19:29 | 1285203 unununium
unununium's picture

Fed has already announced what it would do.

Treasuries forked over would be offset by negative retained earnings, ensuring that Fed doesn't pay residuals back to T for a long, long time.

Tue, 05/17/2011 - 20:10 | 1285320 woodashes
woodashes's picture

cant we classify 1.4 trillion worth of m3 debt out of the fed's black box worthless? there's gotta be a few hundred trillion in there by now we can default on 

Tue, 05/17/2011 - 17:28 | 1284795 Dr. No
Dr. No's picture

You are getting confused in thinking the interests of the FED are the same as the interests of the US government.  Let me know what advantage the FED has to forgiving the gov debt and your theory may have basis.

Tue, 05/17/2011 - 16:53 | 1284635 NotApplicable
NotApplicable's picture

Agreed, but given that the FDIC is back-stopped by a credit line to the Treasury, Brian's question is still relevant, at least in the short-term.

In other words, its yet another tripwire if someone decides they need to blow something up.

Not that anyone would do that...

Tue, 05/17/2011 - 17:30 | 1284814 Smiddywesson
Smiddywesson's picture

People have to have enough money in deposits to make a bank run.  Most people today are either invested, or living hand to mouth.  No bank runs

Tue, 05/17/2011 - 17:59 | 1284907 Caviar Emptor
Caviar Emptor's picture

+1/2. I agree, with some reservation. Only because the pain threshold for banks today is so low that even a small "run" could elicit a cry for help. And panic begets panic

Tue, 05/17/2011 - 19:03 | 1285119 Zero Govt
Zero Govt's picture

it doesn't take much to bring a bank or Govt down... they're all leveraged to fuk and on a knife-edge ...great economic system we have eh?

Tue, 05/17/2011 - 20:38 | 1285379 mt paul
mt paul's picture

bank run of the 21st century

 

is just a bunch of people 

not paying their debts ...

add to the thought

30x leverage on those non performing assets 

that's a bank killer....

Tue, 05/17/2011 - 17:04 | 1284687 bob_dabolina
bob_dabolina's picture

Brian-

Wouldn't that be a shit show.

An insolvent government trying to bailout an insolvent financial system by an insolvent tax base.

He, see, see what they did there?

...time to install a MK-19 on my roof?

Tue, 05/17/2011 - 17:18 | 1284764 trav7777
trav7777's picture

only if that roof is in a country that isn't bankrupt and doesn't have a police/security apparatus that can and will find you no matter where you are.

A lot of the bugout ranchers seem not to get a couple of things; the first is that they are WELL within irretrievable contamination distance of a NPP if "TSHTF" and the white guys stop going to work for a week.

The second is that the .gov knows exactly where you are and can destroy you and everything you own with one cheapass MQ9.  These things can loiter for a lot longer than you can.

The USAF, CBP, DHS, and everythefuckbody has these planes now, hundreds of them.  They will find you.  They cannot be reasoned with.  They cannot be bargained with. They don't feel fear or pity or remorse.

Tue, 05/17/2011 - 17:45 | 1284856 MrFriskles
MrFriskles's picture

Sorry, an NPP? What is?

Tue, 05/17/2011 - 18:12 | 1284943 traderjoe
traderjoe's picture

Nuclear power plant. 

Tue, 05/17/2011 - 17:52 | 1284886 tmosley
tmosley's picture

You sound like you're shitting your pants. Which is hard to do, considering you are an excremental.

Also, funny that you for some reason assume that the government is going to be after individual people just for moving away from the city.

Even more funny is that you think 43 million dollars is cheap.

Somehow MORE funny than that, you think the government can somehow afford a big old missile for every country home in the US.

Seriously, you should write doomer fiction. It'll sell well right alongside marked down Jeff Foxworthy books and no-name Spam-lookalike products.

Tue, 05/17/2011 - 18:35 | 1285023 trav7777
trav7777's picture

what they cannot seize with the local police they will take by force with the military.

You idiots with your farms thinking you're safe and you've hardened things and TS will HTF and you'll just bugout to your ranches are morons.

If you put up any resistance to the "property of the Party" sign, they will overfly you with a drone and hellfire your ass.

Future archeologists will assume that the colocation of so many shallow deposits of trivial amounts of silver bars with fossilized hams with a metal plaque marked AGM-114 must have been some kind of insane cult of some sort.  They'll be accidentally right.

What was it that caught your ire, cliff?  The fact that if white people don't show up to work, your farm will be radioactive in short order?

Tue, 05/17/2011 - 18:59 | 1285091 Shell Game
Shell Game's picture

Many of my mil and ex-mil freinds say they won't comply with those orders.  The domestic police on the other hand....  at least until they are wiped out by my mil and ex-mil friends.  lol!

When chaos hits the dynamic system fan, binary scenarios like yours may not bear a whole hell of a lot of fruit.. 

Tue, 05/17/2011 - 19:11 | 1285141 Rynak
Rynak's picture

You folks are missing the point. The problem is not if the US gov can win a material war against its armed population. It cannot. The whole idea screams fairytale lands.... all their fancy hightech weapons are useless if they have an entire population against them.

No, the much bigger danger is: Will this even happen? Will they have most of the population against them? Distinguish between what YOU would do, and what the masses would do. Take a good look at them. Will they react with consistent resistance? Are those people who would engage in civil war rather than being submissive and being slowly boiled alive?

I don't know the answer. I'd give it aproximatelly a 50/50 chance with a slight bias towards: No.

Tue, 05/17/2011 - 19:37 | 1285236 Shell Game
Shell Game's picture

There will be a breaking point, especially with those who have a shred of self-reliance and desire to be left the fuck alone. Most of those types will be armed.  It won't require anywhere near 50% of the population, a mere 10-15% may be all it takes.

Tue, 05/17/2011 - 19:50 | 1285268 Clay Hill
Clay Hill's picture

Agreed.

We're supposedly chasing one or two hundred AlQeada in Af-Pak, right?

What's 1% of 310 million?

Tue, 05/17/2011 - 20:08 | 1285315 Rynak
Rynak's picture

I honestly hope that you're right. And i rarely hope - i dislike doing it, because of what it implies.

Tue, 05/17/2011 - 20:24 | 1285340 Clay Hill
Clay Hill's picture

Buckle up.

Like excising gangrenous flesh, do it, or die.

The only questions in my mind are the timeline, and chances of success.

Tue, 05/17/2011 - 23:19 | 1285931 trav7777
trav7777's picture

bullshit.  the people in the cities will view you as insane and a threat to "order."

JFC, did the Iron Curtain never exist or something?

Tue, 05/17/2011 - 19:47 | 1285256 nmewn
nmewn's picture

By killing the people they defeat what they (some of them) think is our purpose and they create more enemies than allies with that practice.

There may be one or two psycho generals out there that would follow a civilian order like this but, colonels & lieutenants are a little, shall we say, adverse to their neighbors & families being slaughtered. There are more good guys than bad guys in the military...people need to wrap their heads around that before delusion sets in completely.

They'll bankrupt the country and we will rebuild it...same as it ever was.

Next time maybe we'll be a little smarter about who we allow in positions of power & responsibility.

Tue, 05/17/2011 - 23:16 | 1285915 trav7777
trav7777's picture

they ALREADY comply with those orders.

Who cares what your FRIENDS say, listen to what people in the military say about others in the military.

Most will obey the orders...jfc, they already drone strike civilians, children, they mow them down all the time.  WTF is the difference; you are just another enemy.

Tue, 05/17/2011 - 23:16 | 1285923 trav7777
trav7777's picture

"many"????  What about the rest of them?  They WILL comply.  And they are the majority.  You are just another enemy.

you will be an insurgent, a terrorist.  Look at what the fuck the military has done at EVERY turn.  Martial law in New Orleans, house to house seizing weapons.  NORTHCOM prep for violation of posse comitatus.

You're crazy if you think the airforce won't missile you- they do it every day from drones, kill children, civilians, whoever.  They "service targets" and you and your ranch are just an abstraction.  Go pull a Randy Weaver and see how you fare.

Wed, 05/18/2011 - 07:16 | 1286390 Clay Hill
Clay Hill's picture

O.K. Trav, for the sake of argument, let's assume 95% of the troops comply.

Do you think the Military is capable of controlling every Port, Airport, Rail or Subway station, Power, Water, and Sewer Plant, Hospital, Clinic and grocery store in the cities while manning every Bridge, Overpass, intersection, pumping station, and railway switch? Leave the local and State police aside, they'll have their hands full covering Jails, Schools, and Administrative buildings.

Do you think the 5% - 10% percent of us who run all that Infrastructure now will make it a smooth ride for them if they try?

I promise you enough of us in those fields won't comply.

 

If you're worried about getting your ass shot off while the 5% renegotiate terms with the .1%, just hide under your couch.

We'll do the heavy lifting.

Tue, 05/17/2011 - 20:04 | 1285304 tmosley
tmosley's picture

Hurp a durp.

It took 2 trillion dollars and ten years to track down the most wanted human being on the face of the planet.  How much do you think it will cost to track down 100,000 people who bailed out.  And WHY would they want to do it?  You don't think they would be more interested in keeping prices down?  To the point that all goods vanish.

Christ, you miss the point to such an extent, it's like I'm not even having a conversation with a human but a pile of living excrem...oh yeah--almost forgot.

The point of bailing out is not to protect yourself from the government (what idiot ever thought that was the point?), it is to protect yourself from the unprepared masses.

More lols come from the fact that there isn't a nuke plant within 600 miles of here.

Further lulz come from your return to constant doomsaying, and pussy-assed submission to authority, along with the use of utter non-sequiturs and fearmongering to try to get others to abandon any plans they had for becoming self sufficient.

Here's a hint for you--nuclear plants can be shut down.  Fuel can be removed and stored in such a way that it won't contaminate a wide area.  Your dumbshit racism is for naught.

Christ, you used to be someone, man.  Now you are nothing but a worthless, shitstained troll.  A fucking walking pile of excrement.  And for what?  Personal hatred?

What a bitch.

Tue, 05/17/2011 - 20:50 | 1285408 mt paul
mt paul's picture

who is going to monitor

safe shut down and storage of fuel rods

when there are no paychecks ..

what happens when the scavengers 

steal the wrong piece of copper...

nuclear garbage is forever...

Tue, 05/17/2011 - 23:26 | 1285944 trav7777
trav7777's picture

the unprepared masses ROTFL...the zombie hordes.

You freakin delusional moron.

You should watch Dr. Zhivago; you really should.  I recommend that one to all idiots with bugout ranches. 

You should also review Ukraine in the 20s.  Think about how remote they were in the early 20th century.

Nothing you say is even accurate or well-thought out.  Stick to "curing cancer," cliff.

Nuke plants can be shut down...ROTFL.  When "TSHTF" and the starving masses start rampaging, sure, yeah, cliff, they'll be shut down.  After they blow sky high and contaminate your ranch.  But no worries, you'll have cured cancer by then, right?

HAHAHAHAHAHAHAHAHAHAHAHAHAHA

Tue, 05/17/2011 - 20:51 | 1285412 sun tzu
sun tzu's picture

You're a nutjob. The military is not going to start killing their own mothers, fathers, uncles, borthers, sisters and friends for no reason. If the order came down to start blowing up farm houses across the country, nobody would comply. 

Tue, 05/17/2011 - 23:28 | 1285949 trav7777
trav7777's picture

No, dipshit, they're going to kill YOUR mother, YOUR father, YOUR uncles, YOUR brothers, YOUR sisters, and YOUR friends.

Do you GET IT yet?

You idiots assume the shit is going to hit the fan but there won't be ANY consequences.  You're just going to live on your little ranches and shit with your chickens...HAHAHAHAHAHAHA.  This is the DUMBEST idea ever.

Ferfal is down there in a collapsed society saying people like you are idiots.  Bunch of misanthropic loner losers with buried canned ham.

Wed, 05/18/2011 - 00:00 | 1285998 Cathartes Aura
Cathartes Aura's picture

p'haps you're right, though when the canadians & amrkns swap out their killing machines, I reckon all those "local trrrrists" will be re-minded about the war machine that rolls over those brown people "over there". . .

Canada, U.S. agree to use each other’s troops in civil emergencies Canada and the U.S. have signed an agreement that paves the way for the militaries from either nation to send troops across each other’s borders during an emergency, but some are questioning why the Harper government has kept silent on the deal.

http://www.canada.com/topics/news/story.html?id=403d90d6-7a61-41ac-8cef-...

the story is over 3 years old. . .

Tue, 05/17/2011 - 17:14 | 1284736 Dr. No
Dr. No's picture

FDIC is the Keynesian last line of defense and they will do everything they can to hold the line.  If FDIC is at risk, expect Executive Orders to fly as well as late night congressional acts to pass.  In the event of FDIC failure, that is the signal the Keynesians threw in the towel.

Tue, 05/17/2011 - 19:32 | 1285212 Zero Govt
Zero Govt's picture

not sure what Keynes had to do with the FDIC and their rediculous mandate to guarantee bank deposits... Keynes advocated Govt stimulus + tax cuts (politicians always forget the 'tax cuts' part of his policy recommendations)

the FDIC's role is the usual socialist nonsense about cotton wooling bankrupt parts of the economy by sucking good money and weakening another part... but the FDIC has become infested with the usual parasites who now use it as a info tape-worm into other banks they have their eye on and as a vehicle for getting knock-down discounts on prime assets

the FDIC, like every other part of Govt, is a sham

Tue, 05/17/2011 - 19:30 | 1285220 unununium
unununium's picture

Great question.  If BofA fails right now, would we see a direct bailout by the Fed?

To taxpayers, this might be preferable to FDIC drawing on its Treasury line.  Inflation steals from all dollar-holders, not just taxpayers.  China might not be delighted though.

Tue, 05/17/2011 - 20:45 | 1285401 sullymandias
sullymandias's picture

I wouldn't worry about a bank run at this point. If BOA automatic tellers stop dispensing cash, Ben Bernanke himself will bring the green down to refill them.

Tue, 05/17/2011 - 22:05 | 1285730 Fiat2Zero
Fiat2Zero's picture

FDIC is insolvent.

Bank runs are mostly digital, near instantaneous, and invisible. Basically CFOs at companies get spooked and start making huge transfers.

The little guy is going to be stuck waiting behind 1000 people at the ATM.

You should definitely have at least $5000 cash on hand in 20s.

Even if there isn't a run on the banks, there are all kinds of disruptions that empty the ATMs quickly.

Tue, 05/17/2011 - 16:34 | 1284548 max2205
max2205's picture

Borrow as in SS trust fund...me thinks anything "borrowed" will NOT be paid back....all that will be in Federal Trust fund will be a piece of paper from Tim saying "IOU (NOT)"

Tue, 05/17/2011 - 17:53 | 1284875 max2205
max2205's picture

TD how much is in the Civil Service fund? More than 15 billion they just tapped

Tue, 05/17/2011 - 20:50 | 1285423 mt paul
mt paul's picture

heard 147 bil can be siphoned off 

the federal pension funds till july

also heard a 300 bil amount ..

instant debt when QE 3 arrives...

Tue, 05/17/2011 - 22:27 | 1285794 Chicken_Little
Chicken_Little's picture

I'm a recently retired Air Traffic Controller in the old CSRS system. Since 1982 they witheld about 150,000K. That money isn't there along with the SS Trust fund. Ponzi scheme. More accounting games to hide the real facts. Bury half of your net worth in the ground and put the rest at Goldmoney.com and check out Thailand.

Tue, 05/17/2011 - 16:18 | 1284468 hedgeless_horseman
hedgeless_horseman's picture

Shareholders can sue management for operating in this fashion.

Citizens?  Not so much.

Tue, 05/17/2011 - 17:28 | 1284796 Dr. Richard Head
Dr. Richard Head's picture

shit, when i breached my credit limit on my zero percent credit card zoomed to twenty two percent overnight.  so when do the interest penalties start making themself known

Tue, 05/17/2011 - 20:56 | 1285439 mt paul
mt paul's picture

used my zero interest card

to buy 3k of freeze dried...

paying it off 250. $ a month 

they hate me ...4 more months..

credit card bytches...

Tue, 05/17/2011 - 16:21 | 1284476 redpill
redpill's picture

OT: Government Motors sponsors "Birth of a Party" Chi-Com propaganda film

http://www.washingtontimes.com/blog/watercooler/2011/may/17/gm-sponsors-and-celebrates-soon-be-released-chi-co/

Tue, 05/17/2011 - 16:21 | 1284493 hedgeless_horseman
hedgeless_horseman's picture

Unbelieveable. 

Once again, I will NEVER buy a GM.

Tue, 05/17/2011 - 16:26 | 1284513 Cognitive Dissonance
Cognitive Dissonance's picture

When the Feds confiscate your IRA or 401(k) and replace the funds inside with good old govt debt, you will have effectively bought GM, both the stock and the vehicles, since I suspect in a few years all county, state and Fed employees and governments will be required to purchase GM vehicles for their fleets and personal use.

Sounds crazy now. But desperate government men do desperate government things.

Tue, 05/17/2011 - 16:32 | 1284540 hedgeless_horseman
hedgeless_horseman's picture

...in a few years all county, state and Fed employees and governments will be required to purchase GM vehicles...

Already looks to be the case in this town.

Tue, 05/17/2011 - 17:43 | 1284851 nufio
nufio's picture

ive bought slv calls with all my 401k money. the way silver prices are going its not going to get much from my 401k.

Tue, 05/17/2011 - 21:23 | 1285581 XPolemic
XPolemic's picture

a) At what strike?

b) If you have the money, you should take delivery even if the option is out of the money.

 

Tue, 05/17/2011 - 16:42 | 1284567 Misean
Misean's picture

Ah, they basically do this now. The only looser would be Ford.

This is the British model of manufacturing management. It worked well in the 70's.

Tue, 05/17/2011 - 16:41 | 1284578 Cash_is_Trash
Cash_is_Trash's picture

Cancel the tickets to Transnistria 'cause communism's comin' to town!!

http://en.wikipedia.org/wiki/Transnistria

Tue, 05/17/2011 - 16:56 | 1284664 NotApplicable
NotApplicable's picture

Now CD, you know they can't require it.

Instead, they'll offer a sweetheart deal that cannot be refused by any "logical" person. Especially one with an election coming.

Tue, 05/17/2011 - 17:17 | 1284745 Herman Strandsc...
Herman Strandschnecke's picture

WTF. Witholding the Future.

Tue, 05/17/2011 - 16:18 | 1284480 oogs66
oogs66's picture

sadly, its totally legal and the fund is set up specifically to allow them to do this, and they have done it before...

Tue, 05/17/2011 - 16:33 | 1284544 anti Oligarchy
anti Oligarchy's picture

I'm hoping someone is keeping track of how much is actually transferred from the pension fund

I have a feeling they will transfer 300 billion but raise is 800 billion when they go back to cover some other special op exercise

Tue, 05/17/2011 - 16:22 | 1284483 NOTW777
NOTW777's picture

and just like that w/o skipping a beat the obama business channel goes from touting the strong recovery to speaking of a "weakening" economy.

Tue, 05/17/2011 - 16:50 | 1284614 topcallingtroll
topcallingtroll's picture

It was just a convenient time to blame republicans.

They had to jump on this opportunity fast.

Tue, 05/17/2011 - 16:19 | 1284484 francis_sawyer
francis_sawyer's picture

& here I was thinking that they could invent a new classification of PAYDAY loans...

Well - I suppose they could always resort to check kiting...

Tue, 05/17/2011 - 16:21 | 1284489 Caviar Emptor
Caviar Emptor's picture

Look, we all know that Reagan proved that deficits don't matter. 

Tue, 05/17/2011 - 21:10 | 1285516 sun tzu
sun tzu's picture

Because blaming Bush for Obama's failures is getting old

Tue, 05/17/2011 - 16:21 | 1284490 nedwardkelly
nedwardkelly's picture

So ridiculous.

This whole debt ceiling debate is yet another farce. So they hit the debt ceiling, but what does he do? He uses pension fund money... Money that will be 'replaced' when the debt ceiling is removed.

So let's see if I understand... They hit the debt ceiling, so can no longer borrow money. The debt ceiling is the max amount of debt they can take on... Ok... So then they 'borrow' money from the retirement trust funds, that will be paid back later. So it's borrowed money, but not debt?

So now debt means something other than something owed?

Tue, 05/17/2011 - 16:24 | 1284503 DavidJ
DavidJ's picture

Remember complication is what solves a system that is failing!!!!  [jk]

Tue, 05/17/2011 - 16:51 | 1284620 zerozulu
zerozulu's picture

This all smells RAT to me. It is done intentionally to tap peoples savings. Ultimately they want people begging for food.

Tue, 05/17/2011 - 17:01 | 1284679 NotApplicable
NotApplicable's picture

Well, you obviously know nothing about accounting, so there!

/sarc

Tue, 05/17/2011 - 17:13 | 1284738 smlbizman
smlbizman's picture

maybe its not borrowed..

Tue, 05/17/2011 - 17:21 | 1284763 Dr. No
Dr. No's picture

Exactly.  They are just failing to fund what was promised.  A default if you will to the pensioners.  When ENRON failed, we all vowed not to work for a company and invest our retirement in the same company stock right?  too much risk.  gov worker relying on gov pension could be considered the same.

Tue, 05/17/2011 - 17:13 | 1284740 legal eagle
legal eagle's picture

So simple, so compelling.  Logic can not be avoided.

Tue, 05/17/2011 - 17:43 | 1284849 SilverIsKing
SilverIsKing's picture

Someone needs to ask Timbo what the plan is if the debt ceiling doesn't get raised.

Tue, 05/17/2011 - 16:23 | 1284491 Cognitive Dissonance
Cognitive Dissonance's picture

Can your 401(k) or private IRA/SEP/SIMPLE be that far away folks? Or better yet, all those defined benefit plans, the so called 'traditional" pensions corporate America is desperately trying to shut down.

I think not. All it takes is the stroke of a pen under national security logic and suddenly you are holding Federal debt regardless of your desire to.

The death spiral has quickened just a little bit more.

Tue, 05/17/2011 - 16:27 | 1284506 Rynak
Rynak's picture

Gonzalo Lira has about 6 weeks ago proposed, that they will either convert 401's into bonds, or do QE3. I think that they will do both, though i'm not sure about the timing.

Tue, 05/17/2011 - 16:37 | 1284554 Cash_is_Trash
Cash_is_Trash's picture

Tim and Ben are just slipping in the tip, JUST the tip, I PROMISE.

 

Tue, 05/17/2011 - 16:52 | 1284624 DaveyJones
DaveyJones's picture

especially fond of Gordon Gekko's comment

Tue, 05/17/2011 - 17:02 | 1284702 NotApplicable
NotApplicable's picture

Tyler, please forward my feedback.

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Tue, 05/17/2011 - 16:47 | 1284592 ThreeTrees
ThreeTrees's picture

It's cool.  Then they'll owe it to themselves.

Tue, 05/17/2011 - 17:18 | 1284747 Shell Game
Shell Game's picture

Last year liquidated 50% of my IRAs for physical Au/Ag. This year 80% of the remaining half liquidated for same. The remainder is for trading fun and is $ I can lose.  Sometimes I marvel at this move and sometimes I think I'm completely insane.  ;-)

Tue, 05/17/2011 - 21:46 | 1285665 Estrella
Estrella's picture

Time will tell, but right or wrong, at least you saw the problem, thought about it and took action.

Tue, 05/17/2011 - 16:22 | 1284495 DavidJ
DavidJ's picture

I guess this is already priced in and thus no rise for PM.

Tue, 05/17/2011 - 16:23 | 1284497 Ruffcut
Ruffcut's picture

So take it out of the bank accounts too. But could you please pay a better interest rate and protect with the appropriate credit default swap written by the usual party that will never have the ability or intention to pay?

Tue, 05/17/2011 - 16:26 | 1284499 topcallingtroll
topcallingtroll's picture

I am counting on the tea party handing obama a bill five minutes before armageddon. Go ahead Obama, veto the debt authorization bill that is attached to a ten percent reduction in government spending.

Tea Party are still a bunch of girly men. I say lets balance the budget now.

Tue, 05/17/2011 - 16:32 | 1284537 Long-John-Silver
Long-John-Silver's picture

We don't need the TEA Party. We need a Guillotine Party.

Tue, 05/17/2011 - 16:45 | 1284580 Misean
Misean's picture

Hmmm...that's so French. How about a Lynching Party...

Tue, 05/17/2011 - 16:57 | 1284670 Shell Game
Shell Game's picture

Second the motion.

Tue, 05/17/2011 - 16:58 | 1284675 topcallingtroll
topcallingtroll's picture

Lynch, Guillotine....I wish something could be named after the troll thst would be so awesome.

How about we bury the politicians and bankers in the ground with their heads sticking out. Then cover said head with honey. We will call it the troll treatment.

Tue, 05/17/2011 - 17:26 | 1284780 Spalding_Smailes
Spalding_Smailes's picture



Got Silver ???

 




"I'm calling it a soft landing -- a return to what is considered to be more normal market conditions,"
- Leslie Appleton-Young, Chief Economist, California Association of Realtors

"The national media is reporting a housing bubble. Don't believe it.”

- Dale Akins, President, Market Edge

“If you own your own home free and clear, people will often refer to you as a fool. All that money sitting there, doing nothing.”
- Anthony Hsieh, CEO Lending Tree

"It's impossible for prices to go down this year."
- Gary Watts, Spokesman Orange Country Association of Realtors

Tue, 05/17/2011 - 17:30 | 1284813 Captain Planet
Captain Planet's picture

look whose back!!!!!!!!

Tue, 05/17/2011 - 17:35 | 1284824 XenoFrog
XenoFrog's picture

Yes, and I bet you wish you had some.

Tue, 05/17/2011 - 17:56 | 1284899 tmosley
tmosley's picture

Can't afford any. Put all his money into RIMM on margin and now he's bankrupt. Had to sell his delivery truck, since the corrupt Chicago pols didn't get their kickbacks from his furniture store, and he suddenly realized "oh shit--there ain't no loads, and fuel is more than the load pays".

lol

Tue, 05/17/2011 - 21:02 | 1285143 crazyjsmith
crazyjsmith's picture

Lynching is too nasty of a word.  We need our own round of "Easing"... maybe we'll call it "Suffocative Easing I"

Now, that sounds a bit cozier, don't it?

Tue, 05/17/2011 - 16:23 | 1284500 RobotTrader
RobotTrader's picture

And China, Japan, Taiwan, and the U.K. continue to wolf down Treasuries like Agustus Gloop.

Despite $14 trillion in debt, another $40+ trillion off balance sheet, debt ceilings, etc.

Why is that?

Because the Fed is the "Master Controller" of virtually all markets.  Anything and everything can be pushed around with a flurry of paper contracts.

And the big sovereign wealth funds have no choice but to buy Treasuries, come hell or high water.

Tue, 05/17/2011 - 16:29 | 1284515 Rynak
Rynak's picture

Stop spreading lies. No one wants US bonds anymore, except of the US and its banks. Go back to suggesting people invest in stocks.

Tue, 05/17/2011 - 16:35 | 1284545 Captain Planet
Captain Planet's picture

+QE3

(edit)

PS: that cute polar bear avatar of mine is holding a sign that says ''Save the Humans''

Tue, 05/17/2011 - 19:55 | 1285281 philgramm
philgramm's picture

that's clever.  How's that workin' out for you?

Tue, 05/17/2011 - 16:40 | 1284556 Boston
Boston's picture

No lies.  I bought lots of US paper several moths ago.....

....not because I like it long-term (I don't), but because the short-term risk/reward looked very attractive.

You've got to sort out your emotions and define your time frames.  Treasuries have been rallying hard since early April, and they should continue to rally until Bernanke announces QE3.

Then it will be time to short Treasuries.....again.

 

Tue, 05/17/2011 - 16:40 | 1284571 Captain Planet
Captain Planet's picture

yea, i know. but i finished college (why, idk) one year ago, and i dont exactly have much to toss around in the markets. what i have goes to physical silver.

wish i could join your market fun. i'm ok, cause i will survive, and be ok for many years to come.

p.s. what doesnt go to PMs goes to farming equipment....(and the weed i need to stay sane)

Tue, 05/17/2011 - 16:54 | 1284650 topcallingtroll
topcallingtroll's picture

Farming equipment.....weed.....hmmm....let me think.......hey i got a business idea for you!

Tue, 05/17/2011 - 17:10 | 1284721 Captain Planet
Captain Planet's picture

unfortunatly in the ussa that gets black helicopters sent your way, and you end up next to DSK....

i'm screwed when quinoa is listed as a schedule A drug...

Tue, 05/17/2011 - 18:16 | 1284961 johnnynaps
johnnynaps's picture

Not when they can't afford to fly those choppers! I'm not sure how anyone can fear this government? Don't remember Katrina? It only took our superior might 10 years and $3 trillion to find a 6 foot 6 Muslim! This government is inept......in all areas! 

Tue, 05/17/2011 - 19:57 | 1285292 philgramm
philgramm's picture

It's not that the government will find and attack his weed farm.  It's that his neighbors will tell on him.  The big bad American war machine is nothing without its proxy, the populace.  

Tue, 05/17/2011 - 17:50 | 1284861 kushmere
kushmere's picture

Amen Bro.

Tue, 05/17/2011 - 16:55 | 1284644 topcallingtroll
topcallingtroll's picture

The third world including china have to eat all the paper we care to give them. Otherwise they suffer mass unemployment.

Mercantilists have painted themselves into a corner.

USA wins again!

Bend over China. We know you want it. If you dont want it just stop. I dare ya!

Tue, 05/17/2011 - 17:02 | 1284680 Rynak
Rynak's picture

Last time i checked, china was "leveling" their exposure to bonds.

Tue, 05/17/2011 - 17:08 | 1284725 NotApplicable
NotApplicable's picture

And playing exclusively on the short-end of the curve.

Tue, 05/17/2011 - 17:23 | 1284775 topcallingtroll
topcallingtroll's picture

Good point.

But china has always bought and sold commodities and financial instruments at the wrong time. Hopefully their choice of the short end is no different.

Tue, 05/17/2011 - 17:14 | 1284735 topcallingtroll
topcallingtroll's picture

Yeah? They lied about 250 billion in bonds they tried to hide in the U.K. also.

Addicts cant help themselves. They hate that we got em by the short hairs. Dont give them any lube this time Bennie boy!

Tue, 05/17/2011 - 17:22 | 1284766 Rynak
Rynak's picture

"You" do not "have em by the short hairs". You're in a mexican standoff. Do the wrong move, and you both go down. M.A.D.

Tue, 05/17/2011 - 17:44 | 1284843 topcallingtroll
topcallingtroll's picture

Mexican standoff may be more accurate. However the chinese have the weaker position and more unstable economy and social situation.

I would rather be in the usa than china if MAD occurs. I believe the chinese understand who will come out relatively better if they try to play games with us and not buy our paper when we tell them to.

Tue, 05/17/2011 - 19:14 | 1285158 Use of Weapons
Use of Weapons's picture

The Chinese had gunpowder about 1,400 years before the West. The Imperial Palace tightly controlled the use of gunpowder so to not destabalise the Empire. The Russians still have 82% of their nuclear stockpile actively engaged & prepped [this is their largest off-book expenditure, and there's no negociations about it].

Yes, of course the Mongols turned up and ravaged them, but smart money says: "Do not underestimate the Chinese".

Especially from a country that managed to lose Vietnam. Badly. Still scarred. Oh, can't keep this up: look. Security Council. Nukes. Do the math. At the moment what is really being decided is who gets what in Africa. The poor always get eaten first.

Tue, 05/17/2011 - 17:01 | 1284698 tickhound
tickhound's picture

Both corners are defined.

Careful what you wish for...

Tue, 05/17/2011 - 17:19 | 1284767 Herman Strandsc...
Herman Strandschnecke's picture

A little birdie just told me that the chinese are getting into cuba. Yeah, giving them rations and new vehicles, etc. Check your own rear entrance.

Tue, 05/17/2011 - 16:29 | 1284518 Caviar Emptor
Caviar Emptor's picture

You mean they invented a perpetual motion machine? 

Tue, 05/17/2011 - 16:30 | 1284529 Burnbright
Burnbright's picture

Perpetual motion machine is made of paper, didn't you know?

Tue, 05/17/2011 - 16:38 | 1284565 Cash_is_Trash
Cash_is_Trash's picture

.. and all along I thought it was mechanical.

Increase the money supply, HO!!

Tue, 05/17/2011 - 16:39 | 1284566 clymer
clymer's picture

go visit DSK and try to talk-therapy your way through this ..horrible case of stockholm syndrome

Tue, 05/17/2011 - 17:12 | 1284728 Bastiat
Bastiat's picture

You are the master ass-clown of zerohedge.

Tue, 05/17/2011 - 17:48 | 1284867 Big Ben
Big Ben's picture

And the big sovereign wealth funds have no choice but to buy Treasuries, come hell or high water.

I don't understand why the SWF's don't just keep their dollars as cash. They are mostly buying short term debt that pays almost no interest anyway. And even if you limit your holdings to (say) one year treasuries for safety, it is entirely possible that the government might unilaterally convert them to five or ten year notes if (when) the dollar crisis hits. Under ZIRP, the tiny interest rates just don't seem worth the risk.

I've never understood why the SWF's are so fond of Treasuries. They could buy private debt, stocks, real estate, PM's, etc. All of these seem like better options to me.

Tue, 05/17/2011 - 19:27 | 1285209 topcallingtroll
topcallingtroll's picture

If they didnt park the money in treasuries it would be more difficult to maintain a currency suppression scheme. They have to do it. However they are trying to slowly and carefully extricate themselves. It will probably take ten years.

Tue, 05/17/2011 - 20:12 | 1285319 Big Ben
Big Ben's picture

They suppress the yuan by purchasing dollars from Chinese exporting firms. This subsidizes exports by creating an artifical demand for dollars which wouldn't exist otherwise. Once they have the dollars, they don't actually have to invest them in Treasuries.

By the way, I recently learned one way that the Chinese government is getting all those yuan that it is using to buy those dollars. In cities like Shanghai, the Chinese government evicts poor citizens from land that their families have occupied for generations and sells it (or more accurately, leases it for 70 years) for lots of money. A small flat in Shanghai can fetch 5,000,000 RMB ($770,000). And there are 40+ story high rises as far as the eye can see, while more are being constructed at a furious pace. There was a recent incident where one poor citizen committed suicide by setting himself on fire when the government evicted him from his land.

 

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