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US Debt Update: 6 Months To Revised Debt Ceiling Breach

Tyler Durden's picture





 

Just in case some people forget what the trade off to the market melt up is, today we are starting a periodic daily report of the Treasury's total debt subject to the statutory limit. Today's total: $12,607,140,000,000. We started March at $12,383,717,000,000. We started the fiscal year (October 1) at $11,853,434,000,000. We have added $223 billion of debt in the last three weeks, and $755 billion in just 5 months. As a reminder, the debt limit is $14.3 trillion. We are $1.7 trillion away from the limit. At March's run-rate of about $300 billion per month, the debt ceiling will be breached by  October 2010. If somehow the government manages to reduce the monthly issuance to "just" $200 billion, we have eight and a half months until breach, or January 2011.

Carry on.

 


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Tue, 03/23/2010 - 16:24 | Link to Comment Mako
Mako's picture

And the spending is not nearly enough, Z1 report shows credit creation going negative for 3rd straight quarter even with the 1.5-2T of federal government spending.  The government has the economy on lifesupport unfortunately it does not have unlimited power to supply the equation needs.

It's over folks.

Then it comes to be that the soothing light at the end of your tunnel
Was just a freight train coming your way

Tue, 03/23/2010 - 16:26 | Link to Comment AR15AU
AR15AU's picture

Meh, if it gets bad enough, they'll just take interest rates down to -5%, and then refinance the whole ball of wax using 30 year notes.

Tue, 03/23/2010 - 16:27 | Link to Comment Blithering ORSA
Blithering ORSA's picture

Awesome!  -5% Intrest.  I'll pay you to take my currency!

 

That reminds me of the old comedy skit.  "Take my wife.  Please!"

Tue, 03/23/2010 - 16:26 | Link to Comment Blithering ORSA
Blithering ORSA's picture

What, the healthcare Reform Act won't bring in enough revenue?  Blasphemy, I say! Blasphemy!

Tue, 03/23/2010 - 16:31 | Link to Comment Racer
Racer's picture

Why do they bother to call it a ceiling any more?

Isn't it more like a lift going up a shaft?

 

Tue, 03/23/2010 - 16:40 | Link to Comment tmosley
tmosley's picture

More like a shaft going up you.

Ba-ZING!

Tue, 03/23/2010 - 16:31 | Link to Comment Hondo
Hondo's picture

Completely insane.  There is no way this will ever be paid back or even the interest.  We're just going to give the creditors more paper until they wont' take it. We are seeing stocks moving up in tandem with debt..........there is no way this is going to end well.  It is clearly a Ponzi casino and when it ends it’s going to be very nasty.  It won’t end because we’ve made it to nirvana either.

 

 

Tue, 03/23/2010 - 16:34 | Link to Comment Mako
Mako's picture

Total debt/credit of the US system could never be paid, it's an impossibility from day 1.

The current US system is $52.7T at the end of Q4.   The Federal government is $12T of that.  

A credit system is never able to pay it back, what would you pay it with?

Tue, 03/23/2010 - 17:14 | Link to Comment TraderMark
TraderMark's picture

Remember, dumping debt on the next generation is ok.  Because we won't ever pay it back, it will be defaulted on quietely via inflation.  Even the mainstream financial media is on board with that stategy.  So in the end, Cheney was right - deficits don't matter because people will gladly give us money the world over and if no, Ben (Janet) will.

 

http://www.fundmymutualfund.com/2010/03/forbes-richard-lehmann-dumping-debt-on.html

Tue, 03/23/2010 - 19:21 | Link to Comment ozziindaus
ozziindaus's picture

I never understood how anyone thought you could slowly decrease the debt through inflation. Yields rise with inflation since the bond market is always smarter than and a few steps ahead of the Treasury/Government and therefor such a maneuver actaully increases the debt.

Now if the gov. was foolish enough to just pay the debt off with fresh money, then I guess they have just found a bigger fool to accept it. 

Tue, 03/23/2010 - 17:25 | Link to Comment Lionhead
Lionhead's picture

"Completely insane.  There is no way this will ever be paid back or even the interest."

Got Gold?

Tue, 03/23/2010 - 19:51 | Link to Comment Mako
Mako's picture

Gold does not save you anymore than Gold saved a Jew in being shoved in the German ovens.  The system runs on credit, when the credit system fully collapse there isn't any amount of gold that is going to save anything.

Tue, 03/23/2010 - 20:40 | Link to Comment Shameful
Shameful's picture

Uh, my family was saved by gold.  They bribed their way out of Soviet occupation in WW2 so I know in some cases gold can save your life.  Maybe you won't get change in your negotiations but family history tells me when the chips are down gold can get your ass out of the fire.

But then again feel free not to buy gold.  Your call but I will. I got a feeling that just as gold has saved lives in times of turmoil before it will once again rise to the occasion.

Tue, 03/23/2010 - 16:34 | Link to Comment Fritz
Fritz's picture

Debt level concerns are so yesterday.

Tue, 03/23/2010 - 16:51 | Link to Comment Internet Tough Guy
Internet Tough Guy's picture

and tomorrow.

Tue, 03/23/2010 - 16:49 | Link to Comment uno
uno's picture

Next:

1,000 X 1 billion = 1 trillion (1012)
1,000 X 1 trillion = 1 quadrillion (1015)
1,000 X 1 quadrillion = 1 quintillion (1018)
1,000 X 1 quintillion = 1 sextillion (1021)
1,000 X 1 sextillion = 1 septillion (1024)
1,000 X 1 septillion = 1 octillion (1027)
1,000 X 1 octillion = 1 nonillion (1030)
1,000 X 1 nonillion = 1 decillion (1033)
1,000 X 1 decillion = 1 undecillion (1036)
1,000 X 1 undecillion = 1 duodecillion (1039)

Other very large numbers are:
One googol = 10100
One googolplex = 10googol
One googolplexian = 10googolplex

Tue, 03/23/2010 - 16:54 | Link to Comment Mako
Mako's picture

I never understand why people think those are big numbers.

What is the difference between 0.1 and 1 or 1 million or 1 billion or .00000001, nothing if you don't have scale.

At the end of the day the system can run for about 60 years, you can make it a little longer but the power needed to keep the equation going becomes very unsustainable. 

Tue, 03/23/2010 - 19:10 | Link to Comment ozziindaus
ozziindaus's picture

Exactly, all they have to do is change the currency and announce we are only one thousand monkeyturds in debt.

Tue, 03/23/2010 - 19:54 | Link to Comment Mako
Mako's picture

The amount is mostly irrelevant, what the scale or what it represents is everything. 

The system is unsustainable, just like the one prior to 1944 or the one before the collapse of 1872 or the collapse of 1807.

There is nothing that can save the SYSTEM or global credit system, there will never be a solution... you will witness the solution.

You can possibly save your State, but the States better wake up quick.

 

Tue, 03/23/2010 - 17:00 | Link to Comment Hulk
Hulk's picture

Never thought I would see debt expressed in light years.

Tue, 03/23/2010 - 20:51 | Link to Comment rubearish10
rubearish10's picture

Are these the next paper denominations, Zimbabwe style?

Tue, 03/23/2010 - 16:49 | Link to Comment 4shzl
4shzl's picture

The 800-lb. gorilla is expanding his turf at the rate of $200/300 billion a month.  Think it's getting crowded in the national balance sheet cage?  For you maybe, but not for him.  Think Mr. Market's gonna cut him down to size?  Dream on -- in history's long march, coercive power (government) trumps markets and private enterprise every time.

Tue, 03/23/2010 - 20:46 | Link to Comment merehuman
merehuman's picture

Nothing trumps math. ask Denninger. LOL

Wed, 03/24/2010 - 01:17 | Link to Comment ThreeTrees
ThreeTrees's picture

Except when it lays them low, ie: Rome.  And the market very nearly ruined all the world's governments two years ago.  Government can kick the can down the road, but debt is real.  It doesn't bend to their will forever.

Tue, 03/23/2010 - 16:52 | Link to Comment Hansel
Hansel's picture

Debt is money.  We're getting rich!!!

Tue, 03/23/2010 - 16:54 | Link to Comment Mako
Mako's picture

Debt is not money but we now use it as money.  

Tue, 03/23/2010 - 17:00 | Link to Comment Hansel
Hansel's picture

Thanks for clearing that up.  We're getting rich!!!

Tue, 03/23/2010 - 17:02 | Link to Comment Mako
Mako's picture

Actually no.  Debt creation is going at a negative rate see Z1 report.

The system is collapsing.

Tue, 03/23/2010 - 17:15 | Link to Comment Hansel
Hansel's picture

Yeah, collapsing to infinity!  We're getting uber-rich!!!

Tue, 03/23/2010 - 17:41 | Link to Comment G. Marx
G. Marx's picture

 

I like your spirit.

Tue, 03/23/2010 - 16:57 | Link to Comment ReallySparky
ReallySparky's picture

Off Topic : Thanks to the health care reform act, Insurance Premiums for my small business just increased 15.2%.  Is anybody else recieved any notice of rate increases?

Tue, 03/23/2010 - 17:01 | Link to Comment Mako
Mako's picture

15% bad... I figured 30-50% right off the bat every year for the next 4 years... by year 5 all those insurance companies will be gone.

What till you see your State tax bill, your State better cancel the agreements.

Tue, 03/23/2010 - 18:00 | Link to Comment JohnG
JohnG's picture

Yes.  In today's mail.  27%. 

On top of 20% in December.

I can't afford that.  Had to lay off the end of the year (35 loyal employees), have most staff on 4 day weeks.  Everyone is afraid.

I don't know what to do, this may run me in.

Tue, 03/23/2010 - 19:14 | Link to Comment Rainman
Rainman's picture

The unintended consequence of ObamaScare.

Here comes four years of healthcare insurance gouging. It's the same scheme the credit card companies used with rates during their "window of opportunity" before new regs kicked in, only they had less time to do it.

Small business will have to.....a) lay off  b) shorten workweeks  c) eliminate employee healthcare d) impose more employee shared cost e) shut down.

More gasoline on the fire of Great Depression II, I'm afraid.

As usual, when you look to the government for a solution, you have already failed.

Tue, 03/23/2010 - 22:41 | Link to Comment pbmatthews
pbmatthews's picture

Its not a function of gouging its a function of all the government mandates on health insurance that went into effect immediately today have Barry's ink dried after signing the bill.

Examples:

1.  By law, insurance policies can no longer limit the amount they pay out over the life of a policy.  Simple expected return math here requires insurance to price this additional payout risk resulting in higher premiums to you.

2.  By law all people now must be pay the same rate as the next person.  It doesn't matter if you work out in the gym 7 days a week, have 5% body fat, and can run a 6 minute mile.  You pay the same as the 600 lbs guy who can't get out his door that smokes 3 packs a day.  You also pay the same as the transvestite hooker that practices barebacking while sharing their heroin needle with the other junkies in the room. 

3. Are you a male without kids?  Not married?  Too bad.  Your policy now must also include maternity coverage and kids dental care (among other things) even though you will never use such services.

The government just usurped all the power of individuals to choose health insurance plans that meet their individual needs.  We now have one size fits all for everyone.

But we are now so much more free.

The fools that elected Barry Soetoro are getting what they deserved.

Wed, 03/24/2010 - 00:22 | Link to Comment JR
JR's picture

A Denninger Double Whammy:

That Didn’t Take Long…

From the forum:

"So I just got a call from my health insurance provider. My family rates are going up $200/month ... $2400/year per employee effective April 1st. Didn't take long after signing to get this s**t going.

So much for the "my plan will save Americans" $2500/year in Healthcare premiums.

F***ing liar in chief. "

Yes, this law will induce people to hire, it will improve health access, and it will be positive for the consumer, economy, stock market and spending.

The market rallies on for today, as I sit back and chuckle to myself...  "I told you so."

Please, buy more stocks to drive the DOW, S&P, Nasdaq and Russell higher on the mythical economic "recovery" and mythical job gains that will take hold as employers, right here and now, four full years before the "benefits" show up for adults in this bill (those very same workers) get whammied for $2,400 per year in additional costs per employee.

PS: One way or another the employees will be paying every single penny of that cost.  Either directly through lower wages (which will do great things for consumer spending and the economy) or indirectly as people are either laid off or not hired in the first place.

------------------------------------------------------------

It’s Gonna Be Like Christmas (Health Care)

Oh boy are some folks in for a surprise.....

"It's just going to be like Christmas," said DeCarlo Flythe, who lost health coverage for his family when he was laid off almost three years ago. "It's going to be great. You know, no worries (about) the bills. We are going to go ahead and pay our co-pay and be alright."

You got the $10,000 for the policy and another $10k for the out-of-pocket deductibles, right?

Yes, I know if you are lower-income you'll get subsidies.  But that being laid off thing might become more-permanently laid off, you see, since if you go back to work your employer will have to either pay a fine (annually) or pick up the majority of that $10k in cost.

If your value in the marketplace is $20/hour, with a 2,000 hour man-year of work (50 weeks x 40 hours/week) your economic value in the economy is $40,000 (gross.)  From this your employer is going to have to take $10,000 out to avoid being fined, which means you now make $15/hour.  Then you pay taxes (FICA and Medicare) on that.  You'll likely get back the rest of your federal income tax (especially if you have a family) but your out-of-pocket medical expenses will still be that $10,000 either way.

So now you've got $30,000/year less about $2,300 in Medicare and FICA tax, and from that you subtract the co-pays and deductibles of $10,000.  You're left with about $18,000 to live on, or about $1,500 a month for your family of four.

This sounds like "Christmas"?

The clue-stick coming to whack these folks upside the head just as did the people who said "I don't have to worry about putting gas in my car or paying my mortgage!" will lead to some rather extreme emotions, I suspect, when the truth becomes apparent.

http://market-ticker.denninger.net/

Wed, 03/24/2010 - 00:16 | Link to Comment SV
SV's picture

Nope - Signed our fixed renewal couple weeks ago for a full year (Read: I got my rates locked for now).  After that year, I expect the doors to blow off it... :P

Tue, 03/23/2010 - 17:04 | Link to Comment Bigdaddydvo
Bigdaddydvo's picture

You guys need to chill out, man, deficits are the greatest.  At least that's what John Kenneth Galbraith JR thinks:

 

http://www.lewrockwell.com/blog/lewrw/archives/54043.html

Tue, 03/23/2010 - 18:51 | Link to Comment DrStrangelove
DrStrangelove's picture

2+2 in the house bit****

Tue, 03/23/2010 - 20:44 | Link to Comment Bigdaddydvo
Bigdaddydvo's picture

;)

Tue, 03/23/2010 - 17:07 | Link to Comment MarketTruth
MarketTruth's picture

"It took 169 long years and seven major wars -- from 1776 to 1945 -- to rack up a cumulative deficit that matches the gaping budget hole of just 28 short days in February 2010." -- Marty Weiss

Tue, 03/23/2010 - 19:04 | Link to Comment HungrySeagull
HungrySeagull's picture

Now I find that totally disgusting.

Can we not slow it down a little bit? Maybe even wait until after April 15 to pay for the needs of the USA after all the Tax reciepts are in?

 

Obama just signed away another hundreds of millions this week didnt he?

 

We are going the way the Romans once did, no one would want to carry the Government at any salary at this rate.

Tue, 03/23/2010 - 17:09 | Link to Comment M.B. Drapier
M.B. Drapier's picture

At March's run-rate of about $300 billion per month, the debt ceiling will be breached by October 2010.

Surely the US adminstration and the congressional Democrats will do Whatever It Takes to make sure that the next raising of the ceiling happens just after the mid-terms rather than just before them.

Tue, 03/23/2010 - 17:11 | Link to Comment Brother Revegen...
Brother Revegend Magoun's picture

It seems to be 5 bln a day including weekends!

Tue, 03/23/2010 - 17:12 | Link to Comment TraderMark
TraderMark's picture

Tyler,

 

If you remember we purposely combined 2 increases into 1 so we would not have to vote on it twice ahead of (and closer to) the Nov 2010 election and piss off the people.  Therefore your October 2010 figure is null and void.  Whatever it takes we will make sure there will be no vote on the debt ceiling until AFTER the election because as we like to say in the halls "people are sheeple!"

Yours in Congressional Love,

The Crew in D.C.

Tue, 03/23/2010 - 17:19 | Link to Comment Cyan Lite
Cyan Lite's picture

October 2010 is unacceptable.  December 2010 is perfectly fine.  If we get close to the ceiling in October, I guarantee you that the Fed will step in and do something to avoid a vote so close to November.

Tue, 03/23/2010 - 17:43 | Link to Comment Rainman
Rainman's picture

Agree. It will be another Christmas Eve Taxpayer Massacre.....like the unlimited credit line boost to F/F on Xmas Eve '09.

......not a creature was stirring. Not even a mouse.

Tue, 03/23/2010 - 17:44 | Link to Comment Astute Investor
Astute Investor's picture

Next move by Treasury is to exchange all outstanding USTs for a like amount of PIK notes....VOILA, budget deficits disappear!

Tue, 03/23/2010 - 17:44 | Link to Comment non-anon
non-anon's picture

Just think if they put the GSE's on the "books" and other entitlements off book.

Enron and Lehman come to mind, we are totally screwed!

Tue, 03/23/2010 - 18:50 | Link to Comment DrStrangelove
DrStrangelove's picture

I have thought of that, no official estimate but I would guess somewhere in the neighborhood of $250-350 trillion not including private debt oc.

Tue, 03/23/2010 - 18:43 | Link to Comment Lord Welligton
Lord Welligton's picture

Taking Chairman Bernanke at his word it would seem that it may not be too long before banks are no longer required to have reserves.

Tue, 03/23/2010 - 20:52 | Link to Comment merehuman
merehuman's picture

Bernanke s idea of no reserves is like a bricklayer leaving out the mortar.

Tue, 03/23/2010 - 19:20 | Link to Comment Carl Marks
Carl Marks's picture

The health care fiasco engineered by the 60s wannabees is designed to collapse the private health insurance industry which will result in nationalization of health insurance. but it doesn't really matter because the dollar will collapse first and martial law will be declared to quell the riots. Right wing dictatorship in the form of fascist corporatism will follow.

Tue, 03/23/2010 - 19:50 | Link to Comment non-anon
non-anon's picture

Someone commented on Mish's global blog that the US defaulted on it's debt

in 1971 (Aug. 1971), when Nixon "shut the Gold window". We have been living

on borrowed time since then, credit and deficit spending, robbing from the future,

destroying the middle class and this Republic in the process.

Tue, 03/23/2010 - 20:12 | Link to Comment Matto
Matto's picture

+1000

Tue, 03/23/2010 - 20:17 | Link to Comment JR
JR's picture

This week, Americans found their world to be pretty much the same as it was last week; sunshine, green trees and  blue sky, politicians either boasting or criticizing. Thanks to the ruling power elite, there’s still relative calm at the seat of government these first days of socialized healthcare—the key to Obama socialism.  A one-party sytem is in place, you see; political continuity and civility is guaranteed

Yes, the Republicans shouted and voted no, but they didn’t jump over Obama’s desk to snatch away the signing pen.  And Geithner can later add the tax numbers to massage the budget…and should the GOP sweep into office in 2010 and 2012, maybe GOP Paulson or another Bob Rubin pal can slide into Timmy’s place.

Last week’s pretend drama, with breathless Limbaugh and Huffington countdowns to the finish, reminds us of the Republican arm twisting on the 2003 drug benefit budget-busting bill, passed after voting was held open for three hours until Democrat “opposition” gave in at 3 a.m.  This past Sunday, most of these same Democrats expanded on the drug measure by closing a coverage gap.

The key word that describes America’s "bi-partisan" government is guaranteed.  It is guaranteed that the ruling elite will get the measures it needs at the critical times--banker-friendly healthcare, a stimulus package to cover bank-bets, a printer-man at the Fed who can funnel funds to Greece and Goldman when needed, and special-people who can even bring on a war and an entire Middle-East-policy to satisfy AIPAC. Even a national hero the likes of a Colin Powell can be induced to provide false-evidence.

But when Americans turned against the war, the rulers quickly limited-the-choice to either a third term for Bush (to be served  by McCain) or a mystery man (they knew and we didn’t).  Turns out nobody can stoop lower or damage more freedoms than Obama when delivering mail for the rulers.

Socialism, it turns out, has a long relationship with that magic term, guarantee.  In Britian’s long march into socialized government, the socialist promoter Professor Harold Laski said a socialist administration needs guarantees that its work of transformation would not be “disrupted” by repeal in event of its defeat at the polls.  Mises quotes Laski as saying attainment of power by the British Labor Party must result in radical transformation of parliamentary government…therefore suspension of the Constitution is “inevitable.”  There can no longer be confusion on who is destroying this American land, this American dream. It’s not the pitiful congressmen, licking the boots of the lobbyists.  And it’s not the privileged class created in the vast bureaucracy of Bush and Obama (a civil servant in Lenin’s colossal bureaucracy, responsible for enforcing this “dictatorship of the proletariat,” earned 1,600 rubles a month while non-party workers earned 75 rubles a month).

It is now easy to pinpoint where America’s diseased tumor is located.  And when the patient finally hears the diagnosis, it is time to order the operation, surgically remove the cancerous entanglements of the private cartel, the Federal Reserve System, carry them out the back door, toss them into the dumpster of history and slam the lid.

Tue, 03/23/2010 - 21:02 | Link to Comment ZimbabweBen1991
ZimbabweBen1991's picture

The CBO has projected that the long term projections that the US will NEVER have a balanced budget ever again. As in never. We are at a point where if the government tax Americans 100% of their income, the tax receipts generated would not be enough to balance the budget. Even if the government were to cut spending by 100% but left Social Security,Medicare and Medicaid we would still have no balanced budget. Right now we are currently borrow 41 cents for every dollar we spend. Our national debt by 2012 will be around the $19 trillion. All of this is based on a good economy and GDP growth. It doesnt add up the futre problems coming down the pipe(Alt-A/Option Arm resets and Commercial real estate resets in 2011, the coming pension crisis and PBGC bailout soon coming,FDIC,FHA bailouts soon coming, State debt crisis and bailouts,and of course more bank bailouts), with these futre problems soon coming our debt could be in the mid 20 trillion mark. And the Fed will have to raise interest rates because if they do not they will unleash an inflation hell on us. Even if they raise rates to only 2% 1/3 of tax dollars will be used to pay the interest of the debt alone. Now imagine 5% interest rate. The one thing that pisses me of is the people who say cut spending will not want their benefits touch or the wars to end or close the military bases we have around the world. The same mentality in Greece is the same the American people have. I'm 19 and I know that America is going to collapse and it doesn't matter how much gold or silver you have because the dollar system will be gone. For example how many chickens is worth in gold bullions five,ten?  Our economy is not only collapsing look at our education system we are not competing around and we have the highest number of high school,college,grad school dropouts than any industrial nation. if you don't believe me call IBM and see what nationality picks up the phone.Americans are not willing to sacrifice to protect the wealth this nation has left. This is what 60 yrs of prosperity and easy credit has done. Americans do not want to believe that the collapse is near and they will riots in the streets like the idiots of Greece. If you cut military spending they say you are "anti military and not a patriot" if you cut welfare your called a "racist" or "anti poor". The day of reckoning is coming and its coming fast. But hey Ben "Helicopter,Subprime is Contained" Bernanke said that "The US government has a technology, called a printing-press, that allows it to produce as many dollars as it wishes at essentially no cost" 


Tue, 03/23/2010 - 23:31 | Link to Comment dondonsurvelo
dondonsurvelo's picture

Amazing that you are nineteen and see so clearly.  As for gold and the price of chickens, if you have something of value and want something of value from someone else, a price will be found.  As someone once said, gold has never been worth zero, at least since it has been used as money.

Wed, 03/24/2010 - 04:47 | Link to Comment HungrySeagull
HungrySeagull's picture

Let's see. A Pre-cooked/processed frozen chicken breast of about 3 pounds or so was worth 10 dollars at walmart.

I buy handgun ammuntion at 30.00 for 50 rounds. That means I can trade you roughly 1 box of 50 rounds for about 3 chickens live or 1 processed/precooked frozen chicken.

Or perhaps 5 gallons of gasoline for one chicken.

Or maybe put my Generator to work servicing the fans keeping your chicken house safe in exchange for about so many chickens to feed my family and neighbors each week for every day of power that I provide.

Obviously I may even use some of those chickens to trade for additional fuel to keep my little arrangement with you going. Or simply patrol for abandoned vehicles with a punch to drain tanks for fuel.

Maybe one hours labor shoveling out chicken house with bob cat for one chicken. (A bit more than minimum wage.)

Simply scale up your price list by barter and trade for any number of people. Say, a town of 5000 needs about.... 40,000 pounds of chicken (A truck load) what will YOU want for that much chicken, assuming they are worth about 10 dollars per 3 pounds? That should provide 5 pounds of chicken to each of the 5000 people, enough for a month or so or a week.

Have to figure out the weight of the entire bird that is edible first.

Once you have that, you can probably establish reasonable trade values based on pricing against the US Dollar when it did finally collapse.

 

Maybe this whole thing is hypothetical but if you and another person offer each other something and both agree to a value of goods or services in trade, you have created a market that might be a basis for all other people in your town, county to follow in the absence of actual US Dollars.

It did not take but a few minutes to invent this to post. Theoratically, the US Dollar is no good, my family is hungry and would like some chicken to cook. We have the firewood and other resources to trade if you have a chicken house filled with chickens to trade to keep your family going.

A thought occured to me that a little side business from the Grainery that provides your chickens the food they need to fatten up might provide your gaurds with the means to make a little white lightning to take the stress off and trade to the angry hungry people who might try to steal chickens while you sleep at night.

And so on. A web can be weaved over and around anything of value.

Tue, 03/23/2010 - 21:59 | Link to Comment gookempucky
gookempucky's picture

Food stamp recipients just breached 39 million----forward hooooo

Wed, 03/24/2010 - 01:04 | Link to Comment Joe the miner
Joe the miner's picture

Don't forget to add fannie & freddie to the total of this insane number. I am always amazed at how little impact the debt has had; remember when we hit one trillion & the chicken littles were saying the sky is falling. One has to ask what will it take to break the camels back?

Wed, 03/24/2010 - 04:44 | Link to Comment HungrySeagull
HungrySeagull's picture

That is going to be an increase in a interest rate.

Once that starts to rise, it's all over. For example. I am paying 8% on so much debt. That means X dollars each month minimum.

Once that rises to say... 20% the minimum will be more than wages earned the entire month.

It wont take much to burn a great forest. Just a spark somewhere.

Wed, 03/24/2010 - 07:43 | Link to Comment Grand Supercycle
Grand Supercycle's picture

 

USD index continues to get stronger, and we know what that means ...

http://www.zerohedge.com/forum/latest-market-outlook-0

Wed, 04/14/2010 - 07:08 | Link to Comment mark456
mark456's picture

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