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Treasury Says Anything But A Debt Ceiling Hike Would Lead To Default, As M.A.D. Escalates A Notch
After in the past week, the blogosphere had been hobbled by one after another mindless oped claiming that the US can easily avoid default by just paying the interest on its obligations, and thus does not have to worry about the debt ceiling, we decided to put some sense to this debate when we pointed out that the "US Debt-to-Deficit Difference Hits Fresh Record, As Treasury Continues To Issue 50% More Debt Than Needed To Fund Deficit" meaning that i) it is not a debt ceiling, it is a debt target (© Lizzie363), and ii) the hundreds of billions of monthly obligations that are funded through debt, are "legal" obligations of the US government that have to be paid in full every month or a default will occur regardless. Neal Wolin, Deputy Secretary of the Treasury, has just released a statement on the Treasury's blog saying pretty much just that. Which, however is certainly not a good thing, as it merely confirms just how totally screwed this country is, and that absent a hike in the ceiling to $15.5 trillion (which we believe is where the debt ceiling will be through March of 2012 when it will be raised to $17 trillion), the dollar will be backed by several trillion in insolvent Federal Reserve Notes, er, assets (that should quickly end all debate about EUR-USD parity). It also confirms that Bernanke has no choice but to continue monetizing debt, through QE and to do that, he needs to make it palatable to the general public, which in turn will mean either a material economic deterioration, or, as the two are apparently identical in the Chairbeast's mind, the Russell 2000.
Just issued by the Department of Turbo Tax Failure:
Treasury: Proposals to “Prioritize” Payments on U.S. Debt Not Workable; Would Not Prevent Default
By:
Neal Wolin
Neal Wolin
1/21/2011
In
his January 6, 2011 letter urging that Congress act to protect
America’s creditworthiness by increasing the statutory debt limit,
Secretary Geithner made clear that any default on legal debt obligations
of the U.S. would be unthinkable. In response, Members of Congress of
both parties have indicated agreement that the United States must honor
its obligations. However, Treasury disagrees with
suggestions by some that Congress could somehow evade this
responsibility by passing legislation to “prioritize” payments on the
national debt above other legal obligations of the United States.
While well-intentioned, this idea is unworkable. It
would not actually prevent default, since it would seek to protect only
principal and interest payments, and not other legal obligations of the
U.S., from non-payment. Adopting a policy that payments
to investors should take precedence over other U.S. legal obligations
would merely be default by another name, since the world would recognize
it as a failure by the U.S. to stand behind its commitments. It would
therefore bring about the same catastrophic economic consequences
Secretary Geithner has warned against, including sharp rises in mortgage
interest rates and other borrowing costs for families; reductions in
the value of homes, 401(k)s and other retirement savings; and negative
effects on the dollar and the safe haven status of Treasury bonds and
other Treasury securities. Such a policy
would also be unacceptable to American servicemen and women, retirees,
and all other Americans, who would rightly reject the notion that their payment has been deemed a lower priority by their government. For these reasons, the
Department of Treasury has always emphasized – regardless of which
party has held the White House or either house of Congress – that the
only way to prevent default and protect America’s creditworthiness is to
enact a timely increase in the debt limit.
Neal Wolin is Deputy Secretary of the Treasury.
»
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You didn't phrase it in terms they understand:
"Failure to raise my personal debt ceiling will lead to nothing less than default."
S L I D E
"Such a policy would also be unacceptable to American servicemen and women, retirees, and all other Americans,"
why does treasury assume service people would be at the bottom of the list?
who is calling for service people to be paid last?
I'm sorry but for my short time in the Army all I cared was that I was paid. But from a future dystopian point of view I can hope they are paid last as they have the guns and will be the first to turn on their masters.
BINGO! (pretty much as I intonated above).
As far as history goes, military personnel, with the exception of the higher-ups, are used and tossed aside. It's the same stupid-assed double-speak as "our policy is for a stronger dollar," as it gets pummeled for the sake of raising exports (for the rich corporate types)- "we take care of the troops," while they repeatedly toss them in stupid-assed situations and then deny them health coverage for being exposed to deadly crap (which is used by their very own "we support the troops" bastards!).
I think the implication is that basically everything would be scrubbed except debt payments. No SS, no medicare, no govt employee paychecks, nuttin'.
"No SS, no medicare, no govt employee paychecks, nuttin'."
So...your sayin there really is hope.
spare change - change you can believe in.
@chet
Sooner or later, it's gonna happen. I'd rather take the bitter medicine today for a better tomorrow.
+1. I have 4 kids. I would work into my hundreds if it would let them start fresh.
I love you all! but we are going to suffer in one form or another, they will make sure...
>> No SS, no medicare, no govt employee paychecks, nuttin'.
No IRS? No military? Don't forget (even though they do) congress are government employees. I might get on board with that.
The sooner the better!
That's just the cynical rhetoric they engage to defend their shitty policy. They did it for Iraq and Afghanistan too, deflect any criticism as 'damaging to our Troops'.
We should not raise the debt ceiling. Congressional proposals to prioritize principal and interest payments can work.
We have to stop this reckless borrowing even if it means shutting down most of the Federal government. Stop feeding the beast!
Just eliminate govt, problem solved.
No, the "problem" wouldn't be solved.
This is all hacking at the branches rather than the trunk. The govt is only a branch on the big tree that is a lie, the tree of endless growth...
All these numbers front the physical realities. They, the numbers, have been obfuscated over the years, but there's still the connection.
It's like claiming that if we pull back the curtain that The Great Oz (govt) will be defeated. We fail to understand that it's all a dream state, and that the root issue is Dorothy's illness, that conquering the villans in her dream doesn't necessarily conquer her real problem- her sickness. Yeah, the pictures cast up on the wall are a distraction, we ALL know that, but so too is the curtain and the "Man Behind the Curtain."
If people truly want a better future for their children the best that can be done is to teach them to pursue sustainability (and to cast off any/all centers of power).
I think you fail to understand that in my view govt is the illness.
But then again maybe you see it as your last sentence indicates. My point is govt is an outdated tool like spears or shields. We simply imo don't need it anymore... its the same result throughout history it gravitates towards more power and finally collapses under it's own weight like a supernova/blackhole. Frankly, govt, is extinct.
"its the same result throughout history it gravitates towards more power and finally collapses under it's own weight like a supernova/blackhole"
Yes. It's the matter of repeating the same thing over and over and expecting different results. Collapsing the govt/system is likely going to allow the bastards to resurect their Ponzi Game anew. The necessary fundamental change is for people to understand that these Ponzis are based on notions of endless growth on a finite planet. The notion of cooperation, be it in the form of a govt or whatever, isn't bad, it's the collective misunderstanding that results in it being/going bad: I think that George Carlin pointed it out well by stating that the govt is made up of YOU and I, and that it's the best that we have to offer... by nuking govt we're essentially nuking ourselves; that it should be done is open for debate, but what isn't is whether we should replace one grow-or-die system with another grow-or-die system...
Trouble is our the way our poltical system works, we only get to vote on Tweedle Dee and Tweedle Dum on election day, each a side on the same coin, and the only other form of political persuasion, that of actually getting out of the couch and marching, is discouraged for so many reasons, and rather effectively, be it distraction or subtle coercion, is also not practical, such that the kleptocrats/oligarchs have the matter firmly in control.
End the Fed. Close it down. That is a good first step. Let the government pay its bills by issuing currency directly. No more "borrowing." For those who think this will result in all sorts of adverse consequences, tell me how the system we've got is any better (other than by offering extremely sweet benefits to the elite-banker class.)
Want to fix the housing crisis? Direct refis via no interest loans from state centered home loan banks. Bang. Housing values rise as the no interest component makes homes more affordable. Yes, I know this might hurt(not help) renters, as their landlords continue to pay interest on their commercial loans. But there might be a creative way to address this - maybe it is a one time thing to allow the system to reset.
You do understand that TPTB don't want the current system to reset. They want it to heal. That is, they are doing their best to bring the status quo back to a healthy state, like it was before.
The question is, what role does demand play in any healthy ecomony? How can you heal a system that grew to support an expanding demand, when demand is shrinking? Let more aliens into the country to keep demand high? Where will the aliens get the money to pay for things to keep demand high?
We will probably settle with China by allowing half of their population to come and live in the US.
Respectfully I disagree. Govt is not us, and we are not govt. That's a false notion breed into you and I because A. we're stupid and believe things, B. we're stupid and look for "leaders".
I will explain to you why we are not govt. First you and I live a statist society right? But as civilians we are expected not to steal or cheat or lie or take the life of another for any gain. However, govt is the only entity in this society that has permission to do all of theses under the guise of defense and entitlements. You must be made aware of the fact that using we or us is a collective term for govt's damaging actions; it shuts down critical thought. If I were govt I'd have permission to wield whatever weapon I like and point at someone else and say "it's for defense or social secuirty" and either kill them or take thier money. Frankly I can't do that. If I tried that I'd be taken down by the govt. So We, Us, are not the government. It's a statist paradigm of thought to believe that we are govt.
I hate to hear the American people say "we bombed Iraq". No WE did not. Out govt and it's hired military personnel did. We stood by and celebrated what our rulers did. I mean think about it. Most people sit there and say "we bombed iraq" probably never stood next to a f-16 or stealth bomber, much less flew one, so it is erroneous to associate the 2nd Lt's bombing run with something "we" did.
We say we need govt for the common good. What is the common good? Ask anyone, and no one agrees. How do we implement the common good action? No one agrees either. Even if the completed the first two parts of the common good how the hell would we know that it worked? No way to measure that and what if it doesn't help everyone? How would we know?
So I ask how would one or the collective implement for the common good that infinite growth cannot exist with a finite planet? Education reform? lol.
Govt is a tool that power hungry people can use to achieve their desired ends. Remove the tool and these power hungry people will have to start a business, work, or die.
That's an excellent explanation of something that the "publik educashun" system is dedicated to preventing the citizens from knowing. Good job!
Word.
"Authority is derived from the consent of the governed, NOT by the threat of force!" -- Barbie in "Toy Story 3"
Unless 'the governed' are in say...Iraq.
If you think that nothing would replace the power vacuum that the removal of the government would create you are living in a dream world. The authors of the constitution knew that something would fill the void left by the removal of the British colonial government. That is why they created a government with so many checks and balances. The checks and balances are the reason it took so long for tyranny to re-appear.
If we remove the government, as it exists today, and have no plan with which to replace it, we will likely end up with something worse (read Nazi or Communist totalitarian state).
Took so long? Are you kidding me? Rome lasted 1000ish years. They only fell into tyranny about 700 years into it. Even after take over for 200 years they were a empire that could not be touched.
How long did the British Empire last? Or the Spanish? Or the Persians?
Woohoo we made it <250 years. Yay. Wow we are something special. Btw we aren't in a slow decline, we are in a very rapid decline.
My general theory is that govt through human evolution will cease to exist. It won't come through revolution.
There is no need for govt purely on the basis that the market can deliver it better and more efficiently.
I'm not envisioning some utopia or something so removed from the modern day to day living. Think about it, how many times a day do you deal with govt? Most of us probably not very often besides taxes on purchases. Now imagine your days with no taxes.
It shouldn't say consent of the governed, it's because we are stupid enough to believe to allow to exist.
http://www.youtube.com/watch?v=ZRG1tWQN6e8&feature=
Here is your world... minus the branches and the trees... and once again, I hope you get your way!
I would keep you for a pet, in a cage to be brought forth to entertain me... while I eat.
Who's On First?
Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.
http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html
Wow...they even lie to each other...shocking!
I'm reminded of an old Richard Pryor skit..."and we would compliment each others lies"...but the meds have kicked in, I'm too zoned to get it for you.
Zoned is good!!!!
Might as well...there are no super heroes ;-)
http://www.youtube.com/watch?v=xPU8OAjjS4k&ob=av2el
So true.
Now, to test your level of zonedness, how many fingers am I holding up
One...the middle one.
No, 'twas two....and I would never be so rude!
I know...index & middle...this way I get to do another Tramadol for being wrong...LOL.
Just playin round Sophist ;-)
Zoned is good. I spent a little time trying to find your Pryor Mudbone "Little Feet" video. Failed. Having a drink.
I went after it too, after I said that...couldn't get it either...it's off the "Is it something I said?" album...friggin classic...album is up in the attic.
The man was ahead of his time...drinking Coors tonight though, I don't think Jameson & painkillers are the way to go, not as young as I used to be ;-)
Enjoy the blue mountains. I am keeping a new years resolution to cut calories, so it is vodka and seltzer for me. I prefer whiskey, but as you said, not as young as I used to be.
"not as young as I used to be."
It ain't for sissies...I see a sharp scalpel in my future...LOL.
A good friend of mine is an Irish cop in Stamford CT. He don't drink none o that protestant whiskey. Jamesons. Problem is, whenever a conversation starts like that, I wake up the next day with grass stains and contusions of the lip. Tequila too. And Gin. Live and learn.
"He don't drink none o that protestant whiskey."
You've found me out...I should be more selective in brand & word...LOL...I knew a Catholic girl once with grass stains...well, maybe some other time ;-)
Who hasn't. Maybe we trade stories someday. Meantime, here's something I did find. G'Nite n.
http://www.youtube.com/watch?v=afIVLB4Ss2g
Zappa!...you da man...in brand & word ;-)
SeeYa
There is no honor among thieves.
(Reuters) - Legislation that would allow U.S. states to file for bankruptcy will likely be introduced in Congress within the next month, Newt Gingrich, the former speaker of the House of Representatives and a powerful Republican party figure, told Reuters on Friday.
http://www.reuters.com/article/idUSTRE70K6PI20110121
Newt Gingrich. Wasn't this guy censured while a sitting Speaker of the House for ethics violations? How in the hell is this guy still "a powerful Republican party figure"? The public has such short memories and the establishment are always ready to forgive one of their own.
He's not. Ever since he shared a couch with Pelosi, the Rs would like him to just shut up and die.
He's been as big a hatchet man as Michelle Malkin (need something idiotic put into the mediosphere...call em up) and only some people forget his Contract on America and how little it did to actually change the debt and deficit situation.
Unlike Obama's Green jobs for America and bailouts for Unions, oh wait.. Never mind..
I believe that you're thinking of Rostenkowski
Hu's on first!
There, fixed it.
I hope he was smiling when he said that. Unreal.
Who's on first? Hu's on first!
http://kottke.org/02/11/hus-on-first
>>
While well-intentioned, this idea is unworkable. It would not actually prevent default, since it would seek to protect only principal and interest payments, and not other legal obligations of the U.S., from non-payment.
>>
This is verbal game playing. Only interest and principal payment failures are "DEFAULT". Failing to pay other "legal obligations" are "breach of contract", not DEFAULT. Breached contracts involve penalties and contract cancellation fees.
THEY DO NOT TRIGGER SWAPS, which only happens if interest and principal is not paid.
This is bogus.
Good point.
The argument is that this is a slippery slope, I suppose. I think I would jsut enjoy the show of the bankers squirming if the debt ceiling were not raised.
But this is where we will all learn that the Tea Partiers are just the new boss, same as the old boss. They will be corrupted, and that will be that. Those who cling to things like "principles" will be swept aside by the oligarchs.
They never had a chance. Just another act in a play orchestrated from above.
Secure the gold. End the Fed.
$1 USGC = United States Gold Certificate = .0062 grams of gold @ $5000/oz
Gonna have to be a lot higher than that or they will price it deflationary again.
Jim Rickards video (2hr) speaking to top military about coming crisis and gold
http://outerdnn.outer.jhuapl.edu/rethinking/VideoArchives/MrJamesGRickardsPresentationVideo.aspx
Read more:
http://outerdnn.outer.jhuapl.edu/rethinking/MainPage.aspx
I watched the Rickards talk/presentation, thanks for the link.
As he has stated in King World News interviews, he accepts as a given that the nation's gold is actually there, in the Gov't.'s possession and unencumbered. THAT is a huge leap of faith. An audit of the Fed and the gold stocks would be needed for his faith and confidence in fractional gold backing to gain traction, IMO.
Another aspect that to me seemed a non-sequitur, was his acceptance of the headline unemployment rate 9.x% (+/-) as the appropriate measure. He cautioned about the potential for near 20% unemployment should the toxic debt be expunged and written off, but that without the debt anchor, the economic ship would right itself and growth would return more quickly. However, he set-up at the beginning, that rightly, this is a depression, not a recession, there is not "recovery", bullshit "growth" from official sources aside.
So while overall, I have a positive impression of the talk, I think Rickards doesn't go far enough in asking questions, and his acceptance of gubmint statistics makes me less a believer that he gets it.
This is a fantastic lecture. I urge folks to watch it if they have time.
quick
gold plate some titanium bars ...
That is sooooooooooooooooooooooooo fucking funny that I can NOT even be a smart ass to you ever... I am crying laughing... God Bless You, SERIOUSLY!
but but isnt this where you want the elites? up agaisnt a wall. they threaten you because it threatens them, and their endless debt spiral. the threats are real because it really threatens them. i didnt see iceland melt away in a buble of evil default they live they thrive. do pensions really want their pensions paid by borrowed money. from their grand kids earnings?
you let them sucker you out of the no bailouts ,
dont let em sucker you again
It's like this, Iceland was like a single tire blow-out on a dually. whereas the US would represent a blow out of BOTH front wheels at the same time! Further, I wouldn't claim Iceland to be out of hot water yet... besides, why would encouraging defaults be good? Seems that we're all propenents of contract law; ignoring It pretty much guarantees moral hazard.
No, we're fucked no matter which way we turn!
I think we're all proponents of rule of law - not necesarily the same as what passes for contract law today.
Meh...this is going to go on until it implodes.
This horse is dead. Enough already. The outcome is known. Its the anticipation of the "BANG" that is killing me. Someone push the red button and lets get on to the pain.
I like the way you think.
The experiment has failed. Higgs-Boson research will create random, unstable singularities that will ultimately destroy the Earth anyway, so how 'bout we get this party started. Let the killing begin.
Just step through the Looking Glass.
Or down the rabbit hole. At least you are assured of arriving in Wonderland!
ORI
http://aadivaahan.wordpress.com/2011/01/21/accidental-lives/
http://www.youtube.com/watch?v=hii17sjSwfA&feature=related
The killing has been going on for a LONG time. Perhaps you mean at a country near you? (rather than in those "other" "third-world" ones?)
Yeah, kinda vague, I agree. A more appropriate expression might be:
Let the "die-off" begin.
If JPM needed a bailout they could agree on that.
BTW, Neal Wolin is a political appointee. This is NOT A CAREER TREASURY DEPT OFFICIAL giving a non partisan opinion.
I got my first FRN with Tim Geitner's signature on it: a 2009 dated one dollar bill. I bet they printed a lot of them!
Surprisingly, no.
It appears the crayons used in the signing were worth significantly more than than the bills issued.
If a debtor says to his creditor "I will not be able to make my interest payments unless you loan me some more money.", it means the debtor is effectively bankrupt. What amazes me is that the Treasury still has no problem finding buyers for its junk (and at very low interest rates).
It seems that each financial era has its own insane assumption upon which everything else is based. In the dotcom era it was that the Internet would make P/E ratios (and even earnings) obsolete.
In the housing bubble era the assumption was that house prices would never, ever fall.
And in the current era the insane assumption seems to be that the US government will be able to borrow forever at miniscule interest rates without ever defaulting or inflating the currency.
Yeah, anyone who would go Long on this is clearly delusional! And what's scary is all those around us who DON'T see this!
bing ooo. and to comment ss. ya
"the dollar will be backed by several trillion in insolvent Federal Reserve Notes, er, assets (that should quickly end all debate about EUR-USD parity)"
If the notes are not marketable due to insolvency would the interest rates not go up? and drive the value of the dollar/cash HIGHER? If the ability of the govt to borrow is crimped, does that not make CASH scarce?
Hmm, Let me check Zimbabwe's dollar stats here.....uhmmmm...
NO
zimbabwe had a money supply that was mostly CASH and the credit part was very small. In the US, money supply (Cash and Credit) consists of 5% cash in circulation and Credit is 95%. So as the credit/debt implodes, cash becomes king. Everything becomes a "cash and carry" market.
Can the Fed print faster than the credit implosion? I think not
It's funny, but your argumentation could have very well applied to Argentina, or, more recently, Iceland.
Sadly for deflationists, their miserable paper bugs dreams went broke, just like everything else denominated in paper.
"Can the Fed print faster than the credit implosion? I think not"
Do you really think it is a question of speed and not a question of numbers?
Actually, he said it was about numbers and speed.
He is absolutely correct.
Are you trying to tell us that there was no urgency to pump multi-trillions into the system?
There was ALL THE URGENCY IN THE FUCKING WORLD.
The big crunch was hours from snapping our spine.
Despite multi-trillions in money supply.....there was none available. Even Bill Gross was yanking cash from his accounts.
Well, you have revealed yourself as a troll.
No. I'm just telling you that you're wrong, that's all.
What would have happened to the US in September/October 2008 if the Fed did nothing?
We would all be dead.
Instead, we will die in 1 or 2 years.
RNP We should try existing without the fed. Let the business cycles happen again. I know they are painful, however, they are a part of life. We are stronger in the long run if we let the stupid fail once in awhile.
Yes, we should let businesses fail. Absolutely. Those banks should have been unwound in an orderly fashion, and the executives fired without parachutes. Still, though, that does not warrant a Fed-less, survival-of-the-fittest, anarcho-capitalist system. It only strengthens the "Fed is mismanaged" argument.
We tried existing without a Fed, and it was an unmitigated disaster. Economies of such massive scale that we have today cannot function without a Fed. If you live in a Gunsmoke community somewhere near the Little House on the Prairie with little growth and no international commerce and the outside world doesn't exist, then your anti-Fed dreams might work. Just make sure your rifle is always loaded.
The orangutans who drag their knuckles through this site only look at the first layer of the onion. Once you peel back a few layers, their positions crumble.
What a shocker. Without central banks, banks fail???
Yes, they do. Because they can no longer perform the fraud known as fractional banking.
But you're spot on: what causes economic recessions is not fiat money, it is fractional banking. Fiat money is another problem: it is an inflationist fraud which confiscates the wealth of the citizens of a country.
So please, go make your crusade against economic recessions in bankers' assemblies, not on ZeroHedge.
It seems to mee that most intelligent libertarians on this website, such as tmosley, don't advocate the end of central banks, but the end of legal tender laws and the right of currencies to compete.
Libertarians, Libriarians?
I hope you gals get your way... I really do!
I just do not think.... that you comprehend whats coming for you... http://www.youtube.com/watch?v=mfFc-uNHBVs&feature=
You have been warned, dont let it be said that you wanted thus, but instead suffered a different fate out of ignorance.
You were for told you fool.
You don't have a get out of SHTF free card we are all going down, FL perhaps hardest of ALL. "I hope you gals get your way... I really do!" What was your solution Sally?
http://www.spanishcay.com/ bye bye bitch...
when the dust settles, when the people want to be protected... I will come running back, in 15 to 30 minutes... to clean up...
but to be clear... becuase plan "B" is available... doesnt mean in my life time I will ever see it, ever.
the people are to stupid and have not suffered enough and even if they suffer enough, they are broadly to chicken shit to react... thusly extend and pretend to infinity...
i guess i could explain electrical storms... tri power and venture to you.... but kevlar boats dont make sense to people from up north.. unless they are slow deep V's...
http://www.youtube.com/watch?v=xxKJgOZXEho&feature=
Why so serious indeed.. I will not attempt that with you again.. What happened to your doggie avatar? I about fell out of my chair when some guy suggested you had carnal knowledge of the mutt while grasping its ears... lol. You an infidel, ha, you would pay Jizya on your knees.
Sorry! need midol? pussy hurt? my bad? I wont be so ruff next time..
as for the pooch... I missed that one.. but I dont link my comments... I say BOO! for the fun, or to provide a spring board for some and poof... on to the next one.
seriously sorry, I thought with all the info I gave it may be helpful... i guess the tone was to, too much... funny is hard in type...
Rub the sand out of your clam and swallow that jizya, infidel, ha..
From a Zero Hedge article this very day titled
Stunner: Gold Standard Fully Supported By... Alan Greenspan!?QUOTING Alan Greenspan no less. Who says:
"There are numbers of us, myself included, who strongly believe that we did very well in the 1870 to 1914 period with an international gold standard"
Meanwhile .... Redneck is sticking his foot deeply in his mouth by saying
"We tried existing without a Fed, and it was an unmitigated disaster"
You're confusing illusion with reality. Amount and Speed mean NOTHING if there's NOTHING to back it up!
I just created a huge number on this here computer, and I did it really, really fast! And, you know what? I'm none the wealthier for it! Heck, and I even prefaced the Very Big Number with "$$"!
The ONLY reason why there has been the apprearance of this all working is because other countries' fiat is also backed by NOTHING. It's a big game of chicken, only blinking means that EVERYONE's fiat explodes!
I'm long physical... (anything that doesn't exist in cyberspace).
Sorry, i was just being a smart ass. Tis true about Zimbabwe. However, us has an entirely different commerce base. Most transactions here take place using electronic funds transfers. We meet payroll with ACH in our businesses, we get paid by large customers via ACH. Small folks we bill and get checks. Personally, I never carry much cash, using debit or credit cards for most purchases and pay bills online
In an absolute crash, no banks, no networks, etc would cash be 'king'? It sure would be nifty to have I guess - but so would pounds of coffee, gas, cooking oil, food, etc.
What a perfectly silly argument. There is no practical limit to how fast currency can be printed. Need more faster? Add a few zeros. For some reason, deflationists fail to grasp the simple fact that money-printing can easily outrun any credit contraction.
So, all these FRNs, how do they get into everyone's hot little hands?
log in.
Congratulations on your successful penetration. Make sure she uses a spermicide when withdrawal is complete
Ok. Although probably deserved, I just junked myself!!! Damn iphones
And here everyone thought the 2012 apocalypse was going to be caused by an environmental catastrophe!! The US gubbament imploding and then exploding like a super nova will be just as bad!!
The US gubbament imploding and then exploding like a super nova will be just as bad!!
Yeah, especially when that implosion assumes the form of multiple cascading thermonuclear reactions.
The fissile material in this case (unsustainable debt) has achieved enough energy to sustain the reaction.
And we could all be just a half second before the blinding flash of light and thermal blast wave renders all that you know and love into environmentally-friendly carbon and ash residue.
The end is nigh.
OK, but what is the downside?
Low Earth Orbit Nuclear Detonation.
All you need is one.
Over Kansas, 10 megaton.. Instantly 1870's technology prevails, Got steam and waterwheels? THAT IS SCARY..
I am ready for that. Bring it.
Just don't do it over Ft. Knox, KY. The family jewels, mind you.
THAT would be scary.
And this happens? "Lights Out" by D. Crawford
http://www.frugalsquirrels.com/fiction/lightsout1-10.pdf
Iran is going nuclear. And they don't even have to hit anything. Just boost it vertically.
Is this ariticle saying that the US can not make it's current payment obligations without a debt ceiling increase? So the US is having to borrow to cover its payments...if so get ready America to take it Greek style
WOW. In essence Neil Wolin states on behalf of the government that what is in the national best interest is not in the interest of the 50 states with respect to their debt & payments. Interesting that once more DC says; "Do what we tell you, not what we do ourselves". Classic.
What this policy maker, and the policy makers he represents fail to appreciate is that, just like the states, the federal government has already defaulted in all but name. Debt targeting and concern for interest payments only is a sure sign of this as all pretense of respect for principal balances is discarded in lieu of attempting to maintain the illusion of solvency.
Here lies the USA.
RIP.
1971-1984.
Tecumseh protected us as long as he could.
http://en.wikipedia.org/wiki/Curse_of_Tippecanoe
More QE is inevitable: monetizing is inevitable; raising the debt ceiling is inevitable; financial consolidation internationally is inevitable… a world plantation with the bankers in charge is inevitable? It seems to me that there are enough duplicitous economists, journalists, politicians and fellow travelers with the central bankers pushing us into down the slope without Zero Hedge joining in the chorus. Please stop with the “inevitable” predictions.
It’s the same arguments every time the Congress raises the debt ceiling. It’s ironic to have a major sweep of Mafia bosses this week at the same time the debt ceiling threats arrive. For it was the Mafia that perfected the extortion and protection rackets so well known to their innocent victims.
If the demands against your homes and families and small businesses are not met, if the money is not provided to the banker mobsters, then the kneecappers will be soon to arrive.
Lemme guess, you call yourself a "realist"
Please don't mention the mafia in the same breath as government...at least the mafia provides goods & services to people who want/need them.
They missed Big Lloyd. Instead of Big Tony they should have gotten Big Lloyd. Is Tony cutting into Lloyd’s percentages?
I thought the Mafia was dead. But here we go again. Well, they find new ways to adapt--now they’re bankers. Slap their little fingers, pass some little reforms and they adapt…because it’s so easy.
No, the mafia just move into banking. The profits were a hell of a lot better. It is the Italians, I tell ya!
Shades of James Carville: “Drag a hundred-dollar bill through a trailer park, you never know what you’ll find.” Ben Bernanke?
We prefer, spaghetti snappers. Excuse you!
Take it from me. Luca. Mafia is a bad word.
"it is not a debt ceiling, it is a debt target (© Lizzie363)"
OR
"it is not a debt ceiling, it is a sign post on the Hyperinflation Freeway (© SilverIsKing)"
there is only one king, the king of fire power and man power... all other kings will fall before him.
HAR!
i really never get people that willingly LIVE in florida
yah, yah, firepower-cocksize-imready for THE END-boy
you need to quit eating that benzene from the gulf.
your king of man and tools always has/always will kneel before the mother....
i woulda thunk you woulda known that being floridian
if only that were true, we all would be a LOT happier.
if only that were true, we all would be a LOT happier.
Look up "Age of Kali" on wikipedia -- She who MUST BE OBEYED is in charge!
what about the golden rule?
he with the gold makes the rules?
You know, in a strange way, I want them to raise the debt ceiling.
In my more naive days I thought it was worthwhile to change the government from the inside - get people in office who stood for the same things in which I believed. I ceased to believe that after watching how Ron Paul was treated in the 2008 Repub primary debates.
Then I thought the real battles would be fought in the intellectual sphere. People would come to their senses after years of bailouts and naked government corruption (or do I repeat myself?). This worldview is arguably more naive than the first, as a two minute conversation with an average citizen will convince you.
Now I think, screw it. Let's do this. Quit the foreplay, it's time to go full throttle. Take whatever budget estimates you feel are worthwhile, then double them. No, triple them. Raise the debt ceiling to a number that would make even Krugman blush. Couple make-work schemes with the US' real pastime (laziness) and pay people per vote on Dancing with Retards. Build highways today, blow them up next week. And most importantly, to make sure Neocons and Zionists are on board, let's invade every last country in the world.
The sooner we end this shit show the better. It's time for the snake to shed its skin.
There you go, now you're talkin. My sentiments exactly. Take a look at the Treasury statements thru the first 3 months of the fiscal year and you can see that failing to borrow even for one month means the game is up. Treasury has taken in $531 billion during those 3 months. So extrap and call that about $175 billion. There's their allowance. Then look at Soc. Security outflow of $66 bil, about $80 bil for Medicare and another $65 bil for Defense, including payment to all those military personnel. Oops. Looks like all the money's gone already and we haven't paid a dime on the debt. The game is fricking up. So what's the difference - think of it as accidentally receiving an AmEx Black Card in the mail with your name on it just before you were about to head off to Vegas anyway. Raise that debt ceiling to the moon, Alice!
Me too.
me three.
raise it. crash IS inevitable, the quicker it happens the more chance our young'ns will have. of course it'll hurt a lil.
Now I think, screw it. Let's do this. Quit the foreplay, it's time to go full throttle. Take whatever budget estimates you feel are worthwhile, then double them. No, triple them. Raise the debt ceiling to a number that would make even Krugman blush.
Absolutely. We should do everything we can to expedite the process. Critical mass will be achieved eventually, and hopefully this event will occur in fractions of a second.
I'm reminded of that William Butler Yeats poem:
"Things fall apart; the centre cannot hold."
-- Grateful Dead, "The Wheel"
Right on, my brother. I reflect on the concept of Lady Liberty when I hear this one:
http://www.youtube.com/watch?v=DxGCMyxEtp8
"All I know, it must have been the roses."
"All I know, I could not leave her there."
--- Jerry Garcia
And while they're at it they can send a bailout to my checking account.
+$14,290,000,000,000
"the dollar will be backed by several trillion in insolvent Federal Reserve Notes, er, assets".
The FRN backed by an FRN. Cheque kiting has never been so open and yet so openly accepted.
Where the hell is Timmy, anyway? Makes me nervous.
He has the butt-elf duty this week in Hu's pants.
I love Friday nights on ZH
+100, good bourbon, Friday night and then "Butt Elf" Timmy lol, lol...
He's putting together a bomb vest to wear to congress when he goes to threaten to blow everyone up if they don't give him his debt ceiling.