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US Treasury Rolls $284 Billion In Bills, $316 Billion In Total Debt In First 10 Days Of June, Cash Balance Down To $4 Billion

Tyler Durden's picture


The US Treasury is once again running on cash fumes, with total US Treasury cash down to $4.3 billion in the Treasury's Federal Reserve account. The reason: the US Treasury has now rolled $320 billion in total treasuries in the first ten days of the month, or over $11 trillion annualized. All those paying attention to interest paid on US debt are focusing on the wrong thing: the monthly scheduled amortization of principal are now by far a much greater threat to the US Treasury than a couple of percent increase in rates. The short-date sides of the curve is getting progressively larger, contrary to the UST's previously announced plan to extend the average duration of Treasury debt. After all, why issue 10 Year+ debt and take on auction and interest risk, when courtesy of everybody rushing away from the equity market, the interest in zero interest overnight maturities is virtually infinite... Unless, of course, you are Spain, where the interest is the opposite of infinite.


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Mon, 06/14/2010 - 19:09 | 413637 tahoebumsmith
tahoebumsmith's picture

Kinda reminds me of the last days before Bernie Madoff's Ponzi came to a screeching halt. The only difference is Ben will continue investing with Tim until the last bottle of ink in the universe is gone.

Mon, 06/14/2010 - 20:28 | 413794 Ragnar D
Ragnar D's picture

Contrary to popular belief, the risks of printing money are quite real.  As the printing presses continue their exponential growth, each barrel of ink will require ten barrels' worth to write all the new laws which in turn will need another hundred barrels' worth to pay for it.

The implications of such rapid depletion of our natural ink resources could become quite alarming, so we'll have to explore a massive ink tax to promote "smart ink technology".

To those of you who say we can replace our dependence on ink with simple electronic accounts, remember that Moore's law only allows us to double how quickly we can added zeroes every two years.  Additionally, hard drive storage space for said zeroes doesn't increase at nearly such a rate.


Naturally we recommend continuing the same failed policies, only faster, while we create a new government body to study the issue perpetually, arriving at no conclusions other than "more resources are needed to study this matter", along with a massive layer of taxes to fund it all.

Mon, 06/14/2010 - 22:23 | 413947 RockyRacoon
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I see a different future:  Printing of FRNs with our personal computers at home!  They will be bar coded for security -- and for tracking, of course.  We use our OWN ink!  What a concept.

Mon, 06/14/2010 - 19:16 | 413653 ReallySparky
ReallySparky's picture

Does this mean that they will start writing bad checks?


Mon, 06/14/2010 - 20:33 | 413799 FEDbuster
FEDbuster's picture

They are ALL bad checks, they just have a great overdraft protection line of credit.

Mon, 06/14/2010 - 20:40 | 413809 Ragnar D
Ragnar D's picture

Depends on which checks you're talking about.  You can look to CA and IL for clues.

Deadbeat dependent?  No worries, your checks will still clear.  Cash away.

Actual taxpayer waiting on a refund?  You're evil "rich", back of the line.

Produce a good the state "bought" from you?  Well we already have it, so what good does it do us to pay for it?


IL politicians are receiving eviction notices for their unpaid offices, I guess because IL didn't think anyone would have the audacity to question the Anointed Ones in The Party.

IL prisons have 6-8 month overdue bills for their prison guard supplies (including their ammo!), so when the vendors insisted they start paying up front, they decided to instead order from out of state.  Just gotta keep finding suckers who don't know how Crook County operates, and they'll never have to pay for anything again!

Mon, 06/14/2010 - 21:15 | 413848 Hero Protagonist
Hero Protagonist's picture

"Hey can ya wait to cash that until Friday," asks Timmy Geithner.

Mon, 06/14/2010 - 19:18 | 413655 Mactheknife
Mactheknife's picture

"Auctions are US." Principal?? Surely you jest. When have we ever paid down principal?

This will keep on working until it doesn't. But hey, that's why we hired Bennie boy. Can you say "thin air"? Sure, I knew you could.

Mon, 06/14/2010 - 19:33 | 413658 john_connor
john_connor's picture

Sounds like a slow motion, perpetual bank run.

So, Ben, if things are so great, why is the 3 mo. T-Bill near zero?

Pretty soon one will have to pay to get thru the Treasury window. 

Mon, 06/14/2010 - 19:18 | 413659 jkruffin
jkruffin's picture

Today's 13wk auction going off at .065% is a clear confirmation of the validity of this submission by Tyler this evening. Went off lower than the previous 28 day.  I bet tomorrow's 28 day auction might go off even money, essentially a place to just park your cash with no interest. Benny's takedown was huge today. How much longer till we see the big fail?? We are oh so close.

Mon, 06/14/2010 - 20:22 | 413780 Hephasteus
Hephasteus's picture

Way to get millions of people to have a stake in box office receipts. Then push through severe piracy laws once you have a big enough gang backing you up. Then you take the people you threw money at to get the law passed and grind them back up with HFT. Wham Bam Why Thank You Mam You Don't Even Make it Hard.

Mon, 06/14/2010 - 19:23 | 413671 opencircle
opencircle's picture

The low cash flow position may explain why my tax refund is delayed. I filed on April 15th and expected date as per IRS site was May 8th.... Now its more than 8 weeks... and the site says- its under process!!!!


Anyone else who paid on the last week - late payment facing this?

Mon, 06/14/2010 - 20:38 | 413805 Jean Valjean
Jean Valjean's picture

Don't worry Open, I just made an estimated payment.  Your check should be in the mail shortly.

Tue, 06/15/2010 - 04:52 | 414232 Pondmaster
Pondmaster's picture

Paid on Apr 15th - Overpaid , should I say . got check yesterday  , and hey 27c interest. Whats the problem ? 

Mon, 06/14/2010 - 19:27 | 413678 John Law
John Law's picture

Is it just me or has anyone else noticed the national debt has really stagnated around 12.8-13.0T? It has been in this range for quit a while now regardless of all the auctions in that same period. I'd be willing to bet they're already pulling a lot of accounting tricks to keep the debt away from the debt ceiling before the elections because it was well on it's way of surpassing it by august or September before it got to the 13T mark and stopped.

Mon, 06/14/2010 - 20:05 | 413744 Tyler Durden
Tyler Durden's picture

It hit $13 trillion ten days ago. It is now $13.05 trillion. It will be $13.1 trillion in one week. It will be $14 trillion in 9 months. Not sure why you think it is not growing.

Mon, 06/14/2010 - 20:09 | 413751 jkruffin
jkruffin's picture

Its at 13.085 T and counting as of today,  but total US DEBT is 54.257 T and getting uglier. 

Mon, 06/14/2010 - 21:59 | 413909 John Law
John Law's picture

Debt subject to limit on 5/3 was 12.870T DSTL on 6/11 was 12.985T. It has peaked over 13T a couple of times then fallen back under. With all the auctions over the last 5 weeks it just seems like it should be a lot higher. Like some where around 13.1T. It just strikes me as they're doing accounting gimmicks to keep it from coming close to the limit before elections. I was fully expecting it to hit the limit around sept.

Tue, 06/15/2010 - 00:25 | 414088 JLee2027
JLee2027's picture

You got bad info there buddy. 13.086 T right now

Tue, 06/15/2010 - 01:28 | 414125 John Law
John Law's picture

That's straight from the treasury dept.. I'm not talking about total debt outstanding, I'm talking about debt subject to limit.


The total debt subject to limit had been rising by ~200B a month. Now all of a sudden it rises barely over 100B and the the net issuance of notes and bonds was still around 200B. So I am wondering if they are using accounting gimmicks to keep the the total debt subject to limit away from the debt ceiling before the elections.

Mon, 06/14/2010 - 20:25 | 413784 Hephasteus
Hephasteus's picture

Ya you have stepped outside of the time space continuum and just need to step right back on in before you get lost out there.

Mon, 06/14/2010 - 19:28 | 413679 Cognitive Dissonance
Cognitive Dissonance's picture

If it would help I could dig out any loose change out of the sofa cushions.

Mon, 06/14/2010 - 20:38 | 413804 RichardENixon
RichardENixon's picture

Only if it's silver or gold.

Mon, 06/14/2010 - 19:29 | 413680 whoopsing
whoopsing's picture

HOPE BOND"S! They have a line-item for hope bond's? I feel confident now

Mon, 06/14/2010 - 19:34 | 413688 Shameful
Shameful's picture

It really doesn't matter.  Yeah running the razors edge looks dangerous but there is a safety net, the Federal Reserve.  We will NEVER have a failed bond auction, even if Zimbabwe Ben has to deforest the planet to print money.

Hell I'm hoping Zimbabwe Ben has the style to keep yields at record lows.  He can have them bought up at next to nothing, they are passing out free money after all.  When you get money for nothing any positive yield is pretty amazing ROI.

Mon, 06/14/2010 - 19:39 | 413701 buzzsaw99
buzzsaw99's picture

Money stuck in logic loop:

If: No decent investment opportunities exist

Then: Rollover

If: No decent investment opportunities exist

Then: Rollover

If: No decent investment opportunities exist

Then: Rollover...

Some day all that money will decide to get up and move at the same time. Waiting... 

Mon, 06/14/2010 - 21:39 | 413873 derp
derp's picture

your code is inefficient, try:

for i = 1 to oo  (infinity)

if investment_op(i) = Nothing then

Rollover(i)= Rollover(i) +1

Else: Armageddon

End if

Next i

Mon, 06/14/2010 - 19:42 | 413706 hambone
hambone's picture

Ever larger principle at ever shorter durations at progressively lower interest rates.  Hmmm...seems there is only one way to go from here and it's ever onwards. 

To stop or slow down issuance or lengthen maturities means you are swamped in interest payments but to go on means you are damned to grow ever larger deficits w/ ever shorter maturities...all the while professor Galbraith in  Texas will be saying we have no issue because our interest payments (as a % of GDP) are low (only part he'll leave out is that it's the ultimate Ponzi requiring both ever more T issuance and ever shorter durations to maintain the low interest payments to maintain the roll).  Think painting yourself into a corner...but a little worse.

Mon, 06/14/2010 - 19:54 | 413721 perchprism
perchprism's picture

I guess I don't understand what's happening here.  When is it "Game Over"?  What precipitates it, and what is the result?



Mon, 06/14/2010 - 20:10 | 413752 Kali
Kali's picture

Its already game over.  Eventually the number of plates spinning on the poles will be too great and to run from the last plate to keep the first plate spinning will be too far to reach in time.

Mon, 06/14/2010 - 20:20 | 413777 Spitzer
Spitzer's picture

i dunno, the first one out profits the most. Vlad Putin comes to mind...

Mon, 06/14/2010 - 21:02 | 413837 Amish Hacker
Amish Hacker's picture

No problemo, hambone. You just end up with an infinite amount of bonds, issued at negative interest rates, maturing yesterday, and rolling over every few nanoseconds. With properly co-located servers, this might work. 

Mon, 06/14/2010 - 22:35 | 413959 RockyRacoon
RockyRacoon's picture

Perfect use for those HFT computers in between surges.  It amounts to a second job for them.  We will all be needing one soon.

Mon, 06/14/2010 - 19:50 | 413714 Cursive
Cursive's picture

Down to $4B?  Look, if Timmay/Benron needs some extra cash, they can just borrow it from the Illinois Teacher's Retirement System.  Creative accounting, people.

Mon, 06/14/2010 - 19:55 | 413720 hambone
hambone's picture

...and if Illinois is short they can borrow NY pension plan and if they are short they'll borrow from Calpers and if short they'll ask the Europeans for some more who will ask Uncle O'bama for more CB swaps.

I'm thinking of these loans like a shell game w/ no money under any of the fast moving shells.  Luckily I know better and trust elected government would never do that to it's citizens.

Mon, 06/14/2010 - 20:40 | 413807 RichardENixon
RichardENixon's picture

Sort of like they're doing in Europe?

Mon, 06/14/2010 - 20:00 | 413734 jkruffin
jkruffin's picture

I'm kinda stumped myself, I have some 28 day bills ending in 2 weeks, and I have them set up to re-invest for the next 6 weeks.  Not sure whether to cancel those re-ups or what.  I would hate to get stuck in a 28-day and I have to pay Benny to hold it as rates go negatory.  The takedown's that Benny keeps doing on these bills is absurd, and it's like he is trying to force people into the ponzi scam on Wall Street for risk heaven. Today's 13 wk auction and its next to nothing rate has me worried, but I am surely not going to put money in equities at these levels and sovereign debts imploding worldwide.

Any thoughts out there how to play this fiasco?

Mon, 06/14/2010 - 20:12 | 413758 Kali
Kali's picture

Cash balance $4B, is this why FDIC could only afford to close one bank last friday?

Tue, 06/15/2010 - 00:37 | 414099 JLee2027
JLee2027's picture

Well that's an interesting thought. I had wondered myself why only 1 bank bought it last week.

Mon, 06/14/2010 - 20:16 | 413766 Implicit simplicit
Implicit simplicit's picture

Why not hedge with a long side short.  TBT seems to be bottoming

Mon, 06/14/2010 - 20:16 | 413768 hambone
hambone's picture

I was gonna ask you the same? 

Mon, 06/14/2010 - 20:19 | 413774 pitz
pitz's picture

Not all listed firms are ponzi scams.  And there are many stock markets around the world, on which, the securities that are listed are mainly that of solid, producing companies.

Equities are historically cheap, so why try and fight the Fed?  The real bubble is all the people chasing these Treasury yields down to zero.  You think that's going to end well? 

Mon, 06/14/2010 - 20:49 | 413820 SamThomas
SamThomas's picture

You have defined the issues succinctly.  So...why aren't you buying gold eagles?

Mon, 06/14/2010 - 22:40 | 413966 RockyRacoon
RockyRacoon's picture

I'm thinking, "No brainer".   You as well it seems.

Mon, 06/14/2010 - 20:57 | 413830 buzzsaw99
buzzsaw99's picture

The takedown's that Benny keeps doing on these bills is absurd, and it's like he is trying to force people into the ponzi scam on Wall Street for risk heaven...


Gee, ya think?

Tue, 06/15/2010 - 01:23 | 414122 PhattyBuoy
PhattyBuoy's picture

Opt out, stupid ... buy Gold!!

Tue, 06/15/2010 - 06:51 | 414276 jkruffin
jkruffin's picture

I've been buying metals here and there on pullbacks, I just don't want to put all my eggs in one basket, although at this point, it may be time to break that rule of thumb.

Mon, 06/14/2010 - 20:39 | 413783 hambone
hambone's picture

Rolling at $300billion per ten days - or $900billion a month (at this pace)...Let's assume much of this is purchased via our money by PD's (from Fed loans at ZIRP).  Only way PD's will stop taking money to buy T's is if short term interest rates go negative and long term interest rates don't cover risk. 

Any thoughts on how likely this outcome could be?  We saw it briefly last year...could we see it again sooner than later and is that the straw that forces the PD's to not buy or buy only longer maturities at far higher interest rates?

Or does the Fed move in directly at that point and dispose of the PD charade and purchase otherwise (method?).

Mon, 06/14/2010 - 22:24 | 413948 longjohnshorts
longjohnshorts's picture

LT rates already don't cover risk -- neither default nor (medium- to long-term) inflation risk.

I built my portfolio 10 years ago on munis. Was considered ridiculous conservative at the time. But, as they mature (or, goddamnit, are called), I have the satisfaction of seeing the principal returned.

I have no idea what to invest in currently. Everything seems either overpriced or sitting on a powder keg. I have some gold bought at ~ $900, but the current price seems rich.  So, more and more, I'm in cash.

I don't feel great about getting a zero return, but then it's better than taking Bennie's sucker bets -- particularly when inflation is so low.  My thought is to wait in the expectation that asset prices -- equities, commodities, real estate -- will plunge in late summer/early fall.

Just to be clear on my inflation expectations: I imagine deflation will continue for another nine months to a year. But, after the Democrats get trounced in the fall, I expect that the they will pull out all fiscal stops for the 2012 presidentials. I expect them to co-opt the Fed to begin QE 2.0. The ultimate effect will be highly inflationary, I'm guessing.

Yes, that should convince me to buy more gold. But, I'm a coward when it comes to exposing my savings to a gamble based on "faith."



Mon, 06/14/2010 - 22:45 | 413972 RockyRacoon
RockyRacoon's picture

Faith is about all any of us have right now.  That's why gold is my best bet.  You have to make your own decisions, of course, but my course is clear.

Mon, 06/14/2010 - 23:11 | 414002 dumpster
dumpster's picture

nothing about faith here

it is math simple...

the race to the bottom all currencies .. unfunded and debt as far as the eye can see,

those that keep the dollar,, are the ones faith based


Mon, 06/14/2010 - 23:07 | 413998 dumpster
dumpster's picture

at 600 gold it was overpriced,, at 900  smart move \\

at 900 gold   overpriced.. but at 1650 smart move

who the heck you listening to 

not mr gold jim sinclair .. or richard russell.

so just turn the cash as it loses value


Tue, 06/15/2010 - 02:10 | 414141 StychoKiller
StychoKiller's picture

Silver will be your friend (if you let it).

Mon, 06/14/2010 - 20:25 | 413786 dryam
dryam's picture

I'm hearing an odd ticking sound

Tue, 06/15/2010 - 00:39 | 414100 JLee2027
JLee2027's picture

...and next will be a boom.  Just no way to tell what the clock says.

Mon, 06/14/2010 - 21:00 | 413833 Atomizer
Atomizer's picture
They Want Your Soul - 4 years ago

Extract your information.

BTW: Obama's Masters want something?

Project M Concept Animation

Next, we have a "prisoners dilemma" in Afghanistan. The jewels have to reach the Masters destination.

Vecna Bear Robot

Twilight Zone: The Obsolete Man / 1961

Mon, 06/14/2010 - 21:18 | 413851 whelchej
whelchej's picture

While the financial condition of the US is not great, isn't it less dire than you say?  Isn't there additional available cash in the Supplementary Financing Program Account?  See these two articles for more information about this account: Quantitative Unease: The Treasury Assists the Fed in Conducting Monetary Policy,, and Follow the Money, John Kemp,, reposted at  Note that the first article indicates that the Treasury traditionally maintains a balance of about $5 billion in the Federal Reserve Account.

If it is as dire as you say, what do you think is safer than US Treasury bills?  If gold, and things are are dire as you say, do you think it remains safe to hold gold through any US  financial intermediary?  Should gold be held in the US only in physical form?

Mon, 06/14/2010 - 22:58 | 413987 tahoebumsmith
tahoebumsmith's picture

While the financial condition of the US is not great, isn't it less dire than you say?  Isn't there additional available cash in the Supplementary Financing Program Account? OMG you are right! There is also cash in the FDIC, Social Security, Medicare, Medicade, tarp, hamp, reserves in the postal service, a stash at Fannie, And Freddie, a buried chest at GM, and a secret fund at AIG. There is money everywhere so lets just fricken have a party!

Mon, 06/14/2010 - 23:14 | 414008 dumpster
dumpster's picture

yep  hold gold in physical form ... its not yours until you do,

Mon, 06/14/2010 - 21:37 | 413876 RobotTrader
RobotTrader's picture

I hardly think anyone is worried right now.

Infinite Fiat financed at 40-year lows.  Indefinitely.

TIME 3-Month 0.000 09/16/2010 0.06
-0.023 / -.023 21:00 6-Month 0.000 12/16/2010 0.14
-0.01 / -.010 21:00 12-Month 0.000 06/02/2011 0.28
-0.005 / -.005 21:00 2-Year 0.750 05/31/2012 100-00+
-0-00+ / .008 21:17 3-Year 1.125 06/15/2013 99-22+
-0-01 / .011 21:13 5-Year 2.125 05/31/2015 100-11+
-0-03 / .020 21:23 7-Year 2.750 05/31/2017 100-06
-0-07½ / .037 21:23 10-Year 3.500 05/15/2020 101-31
-0-09½ / .031 21:19 30-Year 4.375 05/15/2040 103-02+
-0-24+ / .044 21:00
Mon, 06/14/2010 - 22:14 | 413933 SilverSurfer
SilverSurfer's picture

$4b, that's all?  Is that enough to run this show for more than a week?

Mon, 06/14/2010 - 22:21 | 413944 RockyRacoon
RockyRacoon's picture

The hits keep comin'.  This centipede has a lot of shoes!

Tue, 06/15/2010 - 09:32 | 414432 Grand Supercycle
Grand Supercycle's picture


As suggested earlier,  the EURUSD daily chart is giving bullish signals.

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