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US Treasury Tells Lawmakers It Needs $2 Trillion In Debt Capacity

Tyler Durden's picture


Reuters reports that the US Treasury has informed lawmakers it needs a $2 trillion debt limit increase to operate... until the end of 2012. Better stated, this is 112% of US GDP (which will soon be declining). This is precisely as Zero Hedge speculated. We hope PIMCO will be swayed soon enough to buy all this extra debt about to start coming down Geithner's conveyor chute. But yes, the Fed will most certainly not be needed to monetize this extra debt: Japan, Europe and Libya have it covered. That said, we don't know if Libyan rebels will have the capacity to monetize the $3 trillion in debt in 2013, $4 trillion in 2014, and so forth. The pattern is clear.


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Wed, 05/04/2011 - 11:25 | 1238362 augie
augie's picture

Stop. Just stop it already.

Wed, 05/04/2011 - 11:34 | 1238434 kaiserhoff
kaiserhoff's picture

No, I like this.  Cut federal salaries in half.  Cut federal benefits by 90%, and then we'll talk.

Wed, 05/04/2011 - 11:51 | 1238546 Whizbang
Whizbang's picture

You're adorable. I think you're forgetting that the few jobs that remain in the economy are completely based on corporate welfare, socialization of risk, and deficit spending. You cut back the federal government, the tit you're drinking off of dries up as well. Federal domestic spending makes up less than 10% of total funding go ahead and push the button, blow it all to hell. 

Wed, 05/04/2011 - 11:57 | 1238615 kaiserhoff
kaiserhoff's picture

Blow it all to Hell?  Exactly.  Private sector wages have been in hell for a long time.  I want to establish some reason for a young person to take a real, productive job, instead of sitting around a government office with his thumb up his ass. 

Even the MSM is catching up.  The Wall Street did a nice piece yesterday comparing the income opportunities of Harvard grads VS California prison guards.  Do you have to guess who has it better?

Wed, 05/04/2011 - 13:50 | 1239265 Kopfjager
Kopfjager's picture

I junked you because you're forgetting who's propping up who.  It's the printing press and small business profits that are keeping the government afloat.  If you reduce the amount of money required to keep the government alive, you increase the amount of money that remains in the private sector.  Less government spending will eventually lead to an increase of cash balances and/or reinvestments in either R&D or more hires.  

In other words, if what you say is true then there should have been massive recessions and unemployment after the return of millions of government workers (soldiers) after the end of WWII.

A hell, "jump and the net will appear."  Make sense?   

Wed, 05/04/2011 - 17:27 | 1240355 Sam Christie
Sam Christie's picture

One makes his own job. I haven't laid anyone off in all of this mess. I took a personal pay cut and kept my employees' pay the same.

I did, however, fire my gardener, but that wasn't because I couldn't afford him. It was because my wife had to call him 2 or 3 times to get him to come do his job. He unmade his job.


Wed, 05/04/2011 - 11:52 | 1238563 sun tzu
sun tzu's picture

Federal salaries and benefits combined is about $200 billion per year for the civilian workforce. So we save $100 billion. All we need to cut is another $1.6 trillion. Cut the entire military $700 billion budget and now we're still short $900 billion. It's hopeless. Yet the chicken littles keep telling us that the government is underfunded and hospitals, libraries and schools will close unless we increase spending by 10% each year.

Wed, 05/04/2011 - 12:00 | 1238619 unky
unky's picture

we  dont need no government at all, problem solved

Wed, 05/04/2011 - 12:34 | 1238800 CH1
CH1's picture

Yeah, but then who will pat us on the head and tell us that nothing is our problem, save for voting?


Wed, 05/04/2011 - 13:52 | 1239283 Kopfjager
Kopfjager's picture

I will.  ;) You're doing great, just keep spending.  

Wed, 05/04/2011 - 12:10 | 1238665 aerojet
aerojet's picture

We got Bin Laden.  Wars these days don't need big armies, they just need highly trained hit squads like DEVGRU and Delta and Mossad offer.  The military is mainly just a jobs program for the lower-performing half of last year's high school graduates, and a place for sadists to get themselves killed in mostly benign (to the rest of American society) ways.  The defense contractors can still sell their drones and their ordnance and then the only problem is what to do with all those kids who don't have any futures.

Wed, 05/04/2011 - 12:27 | 1238759 Forward History
Forward History's picture

I have quite a few of those underperforming "kids who don't have any futures" as friends stationed in Iraq and Afghanistan now. You need to check the elitism in your post. It's disgusting. 

Wed, 05/04/2011 - 14:04 | 1239354 Kopfjager
Kopfjager's picture

Or, our military is stacked with professional war fighters who, despite graduating from college, never found civilian life to be all that satisfying.  Believe it or not but some of us would rather hunt Taliban than sit in a cubicle.  Not saying I'm more man than you or anything... I mean it's totally fine that you prefer to live in a social environment that produces things like Justin Bieber.  I'd just rather live in a warrior society.  

Wed, 05/04/2011 - 15:42 | 1239815 RockyRacoon
RockyRacoon's picture

Hey there, Mr. aerojet.  Having been on both sides of the military scene, I see your comment as being spot on.   Sorry to say.   My experience has shown that even some of the more "elite" services like Navy and Air Force attract the less socially equipped, in many senses.  You got some serious junking for speaking a bit o' truth.  Not to say that there aren't some very qualified folks who join the military for all the right reasons.  Cut to the bone, a military career (or short enlistment) is a voluntary action, thus making sympathy or patriotism unnecessary.  Save the flag-waving for the conscripted.

Wed, 05/04/2011 - 15:49 | 1239849 Forward History
Forward History's picture

So if someone volunteers to serve, they're less patriotic and deserving of less respect than someone drafted?


Thu, 05/05/2011 - 03:39 | 1242198 Kopfjager
Kopfjager's picture

Economics/finance isn't my profession so I often came here for sensible advice.  I was under the impression that people here were fairly intelligent...  until the subject shifted onto something I am expert on--warfare.  

This place is infested with naysaying fools.  Before the internet, these sorts of people had to face living alone.  Now they have a place to meet and cheer each other on and create the illusion that they have numbers on their side...

Thu, 05/05/2011 - 10:58 | 1243251 RockyRacoon
RockyRacoon's picture

Nope.  I repeat myself:

Not to say that there aren't some very qualified folks who join the military for all the right reasons.

I've met them, served with them, and been proud of it.

Wed, 05/04/2011 - 12:28 | 1238743 TruthInSunshine
TruthInSunshine's picture

The annual budget deficit is now 1.8 trillion.

The annual budget for 2011 is forecast to be 15 trillion. Total debt is budgeted to increase from $11.9 trillion in FY2009, to $13.8 trillion in FY2010, and $15.1 trillion in FY2011.[3][4]

Approximately 80% of the annual budget is now mandatory spending, mostly on Social Security, Defense and Medicare (the Big 3).

Defense, alone, is responsible for just under a trillion USD expenditure, annually (it's much more, using more accurate measures of tracking).

The U.S. spends more on defense/military component of its budget than the next 18 largest sovereigns of the world do, combined.

If the U.S. could muster the ability and will to cut the budget by 10% per annum, and using 2011 fiscal year calculations, we would have achieved a 1.5 trillion dollar savings within a decade, even adjusting for real changes in monetary value.

Use 20% reductions instead of 10%, and over a 30 year timeline, we could achieve a pare down of 9 trillion.

Is this possible? Yes. Likely? No. Not without a semi non-comatose public who don't give a shit about the literal future of their children, and who are already seeing their young and newly minted college grads not be able to find gainful employment at anything resembling a living wage.

Wed, 05/04/2011 - 12:53 | 1238912 alexwest
alexwest's picture

good post but..

# annual budget for 2011 is forecast to be 15 trillion
no its around 3.8 trln$

#we would have achieved a 1.5 trillion dollar savings within a decade

pal, you dont get it.. THERE'S NO FUCKING DECADE OR ANYTHING by thE end of 2012 USA debt will 17 trln, 1 more year its 19 trnl..

lets assume feds fund rate will be 2-3 %, so 10 yy will be 5-7%, so only debt servicing will around 1 trln $$.. lets assume budget recepits will be 2.5 trln ( i doubt),
so its 30% of budget...

do you get it ? now out of 3.7 trln of budget, debt servicing is less 300 bln, less 10%..

GOLD 3000$, AND ON.. oil will be 20-30$, 10 yy % will be +8 %

good luck

Wed, 05/04/2011 - 13:03 | 1238976 TruthInSunshine
TruthInSunshine's picture

Alex, I agree that rising interest rates on treasuries are the dagger to the heart. The Federal Reserve is already insolvent, if in fact it's truly an independent actor, and there's no collusion between Treasury and it (which there is), and in fact, it's insolvent even if there is.

Let yields on the 3yr, 10yr and 30yr tnotes rise even by 100, 200 and 300+ basis points, respectively, and then recalculate the interest due component of the debt.

There's no out.

Wed, 05/04/2011 - 13:08 | 1239017 alexwest
alexwest's picture


US debt is 800 pound fucking King-Kong.. but it can be managedlook at Japan...thye print 100% of taxable revenues for years

USA/Fed cant afford raise rates, cause it will require more and more printing , but PRINTING RESERVE CURRENCY IS #UKCING nightmare.. better to default and issue new currency backed by gold ( aint gonna happen)

agree, no way out .. game is over..

Wed, 05/04/2011 - 13:22 | 1239095 oklaboy
oklaboy's picture

Truth, nice write, but as to the next 18 countries? If China has 20 million unders  arms, and pays them pittance, I guess they are cannon fodder? There for the show? Lots of people with lots of guns for what? And as for the 18, do you wanna live in any of them? And how many of them are democracies not under the threat of attack, domestic or forgien? You can cut everything else, because if you don't have Defense, neither will you have the rest.  

Wed, 05/04/2011 - 14:42 | 1239557 Non Passaran
Non Passaran's picture

There's Defense as in "defense", and there's Defense as in DoD.

The post-cold war DoD has been an overkill, so to speak.

Wed, 05/04/2011 - 16:40 | 1240105 thefedisscam
thefedisscam's picture

Defense spending ALONE is 22% of the Fed. budget, adding Home Land Security spending, easily 30% or more

Wed, 05/04/2011 - 17:28 | 1240364 Sam Christie
Sam Christie's picture

$100B is a good start. Now let's cut the rest of it in half and we'll be there.

Wed, 05/04/2011 - 11:36 | 1238447 sheeple
sheeple's picture

right, 2T debt ceiling is a metals-negative facts which caused the most recent violent sell-offs


i concur with the market


Wed, 05/04/2011 - 11:49 | 1238555 johngaltfla
johngaltfla's picture

They will get it watch and see. But if they do, there isn't enough room to jump into the UDN trade....

Wed, 05/04/2011 - 12:40 | 1238831 Gene Parmesan
Gene Parmesan's picture

Just one more hit, man!

Wed, 05/04/2011 - 11:23 | 1238363 unky
unky's picture

so it seems the market didnt set the price of gold and silver right yet because if this were true, $2 tn additional debt would mean the PMs should surge

Wed, 05/04/2011 - 11:27 | 1238377 Tyler Durden
Tyler Durden's picture

"The market is efficient" Alan Greenspan

Wed, 05/04/2011 - 11:33 | 1238417 EscapeKey
EscapeKey's picture

"Financial Stability in Iceland" - Frederic Mishkin.

The analysis in our study suggests that although Iceland's economy does have some imbalances that will eventually be reversed, financial fragility is currently not a problem, and the likelihood of a financial meltdown is low. However, the possibility that multiple equilibria might occur suggests that policy measures to bolster confidence in the Icelandic economy and financial system would be beneficial. We suggest four such measures: 1) financial supervision might be more effective if it were consolidated inside the Central Bank; 2) Iceland's commercial banks should be encouraged and should also see that it is in their own interest to disclose more information about their activities; 3) the inflation measure used for the inflation target should minimize the influence of housing price fluctuations, and; 4) the government should implement a formal fiscal rule to dampen the Icelandic

business cycle. These measures are by no means exhaustive but could help improve the future stability of the Icelandic economy.

Wed, 05/04/2011 - 11:42 | 1238489 Gubbmint Cheese
Gubbmint Cheese's picture

You are wrong EK.. his piece was called "Financial INstability In Iceland"... just look at his C.V.




Wed, 05/04/2011 - 11:46 | 1238540 EscapeKey
EscapeKey's picture

Tyler Durden at ZeroHedge points out this video of Columbia University economist Fredric Mishkin who has changed the title of his 2006 pen-for-hire paper on Iceland’s economic state from Financial Stability in Iceland to Financial Instability in Iceland.

What an absolute fucking sleazebag.

Wed, 05/04/2011 - 11:52 | 1238556 hedgeless_horseman
hedgeless_horseman's picture

I couldn't hear Timmy very well over all the cheering regarding Osama.  What did he say?

Wed, 05/04/2011 - 15:17 | 1239708 Non Passaran
Non Passaran's picture

Haha, yeah right.

Watch the author (try to) BS his way out of that on that recent movie about the crisis.


Wed, 05/04/2011 - 11:46 | 1238535 The Grip
The Grip's picture

...stealth retitled to Financial INstability in Iceland. After his s--- got called out.

Wed, 05/04/2011 - 11:52 | 1238557 Votewithabullet
Votewithabullet's picture

Gross goes new-clear  "holding treasurys is an abdication of responsibility".

Wed, 05/04/2011 - 11:53 | 1238582 DavidC
DavidC's picture

And "Prove me wrong" Alan Greenspan...

The hubris of the man.


Wed, 05/04/2011 - 11:58 | 1238620 Tonesvette
Tonesvette's picture

I will surmise you're being sarcastic about Europe, Libya and Japan picking up the tab next year. But just in case, I need to ask, QE is a done deal, no ?  It really just has to be announced.

Wed, 05/04/2011 - 11:28 | 1238404 Ecoman11
Ecoman11's picture

PMs are surging, but just in physical. Unfortunately by the time everyone realizes that, there will be no silver left. Keep buying those paper dips guys cause your helping guys like me buy more bullion. Thanks

Wed, 05/04/2011 - 11:31 | 1238410 gordengeko
gordengeko's picture

The banks are short silver contracts see, the tipping point is near.  Propaganda pushed the fiat price down.  Just wait.

Wed, 05/04/2011 - 11:34 | 1238432 unky
unky's picture

wait, lets assume the comex really defaults or something like this but at that time silver is at lets say $30. so if this occurs i would still have the time left to immediatley go to my dealer and buy the phyzical then.

Wed, 05/04/2011 - 11:40 | 1238495 NotApplicable
NotApplicable's picture

Well, assuming that somone else didn't buy them out at $33. Or $35, or $40.

Other than right after the May US Mint shipment, I don't expect US dealers to have any ASE inventory for very long. Tulving doesn't even have any listed right now, so I'm guessing all of his May stock has been sold. He does have Maple Leafs though.

Wed, 05/04/2011 - 11:45 | 1238524 unky
unky's picture

i monitor the inventory of several dealers very closely every day. so i think i just wait and see how deep the price will fall.

Wed, 05/04/2011 - 12:40 | 1238847 The_Dude
The_Dude's picture

Do tell !! :o)

Wed, 05/04/2011 - 12:16 | 1238697 gordengeko
gordengeko's picture

If they increase the debt ceiling flooding the market with more dollars, how does that justify a selloff in gold, silver and oil and milk for that matter?  It doesn't, which is why we have gas above the 2008 high while oil has been basically flat the last month?  Fear is being implanted in the markets.

Wed, 05/04/2011 - 11:55 | 1238587 johngaltfla
johngaltfla's picture

so it seems the market didnt set the price of gold and silver right yet because if this were true, $2 tn additional debt would mean the PMs should surge


Dude there will be so many margin calls if they approved this it would not be funny. Freaking hilarious, yes, but funny, no.

The overseas physical buyers would crowd out most American demand.

Wed, 05/04/2011 - 11:59 | 1238623 disabledvet
disabledvet's picture

"patience young grasshopper."  and "prepare to hop!"

Wed, 05/04/2011 - 11:25 | 1238365 TruthInSunshine
TruthInSunshine's picture

That's nice, Timmay.

Did you ask The Bernank?

No more POMO?

What! WHAT!!!


Why stop at 2 trillion, you blatantly incompetent American Government REJECTS. Why not just ask the equally incompetent CONgress for 20 trillion?



Wed, 05/04/2011 - 11:50 | 1238539 NotApplicable
NotApplicable's picture


You don't really think voting can improve anything, do you? It was voting, after all, that created this mess.

At some point you have to stop this insanity and realize all you are doing is to help support the beast that empowers criminals over the lives of honest people.

Vote every single one of them out, and you'll soon have an even worse situation, as all of the new unknowns can be manipulated in ways you wouldn't expect from the old guard, a known quantity. It is not the occupants in office, but the office itself, along with the idea that one man needs to hold a gun to the head of another in order to best secure a peaceful society that is the problem to address.

Wed, 05/04/2011 - 12:40 | 1238844 CH1
CH1's picture

At some point you have to stop this insanity and realize all you are doing is to help support the beast that empowers criminals over the lives of honest people.

Sadly true... and well said. Thx.

Wed, 05/04/2011 - 11:59 | 1238608 Mudflap
Mudflap's picture

"Democracy is four wolves and a lamb voting on what to have for lunch."

- Ambrose Beirce

Wed, 05/04/2011 - 12:48 | 1238881 Almost Solvent
Almost Solvent's picture

So it appears we're down to the last 2 wolves, government & big corporations, arguing over who gets to eat last . . .

Wed, 05/04/2011 - 11:23 | 1238368 EscapeKey
EscapeKey's picture

This thing is going to be lots of fun once yields start increasing. Then we'll see a parabolic rise in the deficit.

Wed, 05/04/2011 - 12:14 | 1238675 LoneCapitalist
LoneCapitalist's picture

Lately Im thinking if yields havent gone up yet , why will they?  I think sooner or later, the fed buys 100% of our debt.

Wed, 05/04/2011 - 12:36 | 1238821 NotApplicable
NotApplicable's picture

Because everybody with a credit card balance is walking around with a ticking time bomb in their pockets.

Remember the new bankruptcy/credit card law? Well, the CC issuers front-ran it and changed everyone's card to a variable rate tied to prime. You could've opted out, and kept your old fixed rate on the existing debt, but it would cancel the card, and thus its entire credit history.

So, most people kept the card, and have since forgotten about the variable rate, as it has yet to rise. But if rates explode, CC interest will explode along with it, absorbing all remaining free credit, unless you can still service the debt. Bankruptcies will ensue, and the CC companies will profit further as the debt is no longer written off, but instead is paid on in perpetuity on a discounted principal.

Wed, 05/04/2011 - 12:42 | 1238836 NotApplicable
NotApplicable's picture

Oh, and once that all plays out, the mandate for QEX has been created, and then the Fed/IMF will ZIRP out the entire yield curve (that 100% purchase of debt you mention), nationalizing the financial industry in the process.

Wed, 05/04/2011 - 11:26 | 1238371 morph
morph's picture

And it is all playing out as predicted. Japan debt GDP ratios coming up soon.

Wed, 05/04/2011 - 11:26 | 1238375 Dr. Engali
Dr. Engali's picture

We're doomed.

Wed, 05/04/2011 - 11:27 | 1238378 FreeNewEnergy
FreeNewEnergy's picture

Default, bitchez!

Wed, 05/04/2011 - 11:26 | 1238381 nah
nah's picture

you know when a banker puppet sits in the treasury begging to spend money he doesnt have politics has no meaning... serious i cant wait for the tea party to cave in to 'prevent' WWIII lol

Wed, 05/04/2011 - 11:29 | 1238390 NOTW777
NOTW777's picture

LOL.  its a strong recovery - we only need 2 tril

Wed, 05/04/2011 - 11:27 | 1238403 NOTW777
NOTW777's picture

can we send timmy to the vacant home in abbottabad

Wed, 05/04/2011 - 11:29 | 1238391 SheepDog-One
SheepDog-One's picture

The 'efficient market' just took AAPL down 7% in seconds on what CNBC reported was a '100 share trade'...LMFAO!

Wed, 05/04/2011 - 12:00 | 1238614 sun tzu
sun tzu's picture

Why should it concern anyone except the buyer/seller of those 100 shares? Probably the same trader

Wed, 05/04/2011 - 11:29 | 1238393 jaffi
jaffi's picture

Ahhhhhhhhhhh, shit!

Wed, 05/04/2011 - 11:27 | 1238395 HamyWanger
HamyWanger's picture

We are the United States of America, Home of the Braves, Land of the Free. We have lots of natural and intellectual resources. 

Debt does not matter, because we will always find lenders.

Wed, 05/04/2011 - 11:31 | 1238421 Tyler Durden
Tyler Durden's picture


Wed, 05/04/2011 - 12:04 | 1238629 disabledvet
disabledvet's picture

you mean "lenders."  as in "lenders of last resort."  sounds like the title of a good book, doesn't it?

Wed, 05/04/2011 - 15:49 | 1239837 RockyRacoon
RockyRacoon's picture

What does it matter?  The Fed is providing both sides of the trade.

Wed, 05/04/2011 - 11:29 | 1238422 Rusty Shorts
Rusty Shorts's picture


Wed, 05/04/2011 - 11:36 | 1238452 unky
unky's picture

regarding food resources i would say the U.S. is a lot better off than china with a 5 times greater population but plenty of deserts and mountain regions

Wed, 05/04/2011 - 11:40 | 1238480 Clorox Cowboy
Clorox Cowboy's picture

To paraphrase:  I wouldn't even buy Treasuries with your money, Hamy.

Wed, 05/04/2011 - 11:48 | 1238522 SoNH80
SoNH80's picture

Ah, the ol' "We can always monetize our own debt, denominated in our own currency, the good ol' U.S. Dollar" argument.  But, when oil hits $500/bbl. as a consequence, what good will that be??  The Confederates were honest enough to admit that their paper currency was B.S., when will Americans at large?  Soon enough.

Wed, 05/04/2011 - 12:33 | 1238781 glenlloyd
glenlloyd's picture

Those who've built their house upon the 'debt (deficits) does not matter' axiom will live to regret it.

Wed, 05/04/2011 - 12:37 | 1238797 Zero Govt
Zero Govt's picture

Hamy   ..."Debt does not matter, we will always find lenders"

Er, that's what Greece said ...that's what Ireland said... that's what Portugal said..

...makes 'perfect sense' in a deep recession to do the exact opposite of what all businesses and consumers are doing: ask for $2 Trillion extra limit on your credit card and keep spending like banshees're on Planet Govt mate : welcome to total economic and social dysfunction

Wed, 05/04/2011 - 16:02 | 1239900 Non Passaran
Non Passaran's picture

Hey Portugal just found a lender for $110b, no?

Wed, 05/04/2011 - 11:27 | 1238399 EasterBunny
EasterBunny's picture

Speaking of Libyan rebels..... With the oil sales having resumed from Libya, as part of an agreement with the rebels; who is actually being paid for the oil? and in what capacity?

Wed, 05/04/2011 - 11:37 | 1238461 NOTW777
NOTW777's picture

no prob. liberals have now decided they love war.  obama might start another or kill someone for a bump

Wed, 05/04/2011 - 11:29 | 1238400 Gubbmint Cheese
Gubbmint Cheese's picture

Tyler, can you please stop referring to it as a "debt ceiling" - its a debt target.

So the US hit its target early, and is now increasing its target by $2t..




Wed, 05/04/2011 - 11:31 | 1238415 jaffi
jaffi's picture


Wed, 05/04/2011 - 11:31 | 1238418 SheepDog-One
SheepDog-One's picture

Expert FED marksmanship, hitting debt target dead center.

Wed, 05/04/2011 - 11:33 | 1238448 Rick64
Rick64's picture

And thats not easy because it keeps moving.

Wed, 05/04/2011 - 11:50 | 1238561 Hulk
Hulk's picture

Debt target Bitchez! Hulk like!!!

Wed, 05/04/2011 - 12:05 | 1238654 Tinfoil Hat
Tinfoil Hat's picture

Not only can it be hit,  but ahead of schedule too!  Someone deserves a bonus!!

Wed, 05/04/2011 - 11:30 | 1238405 SheepDog-One
SheepDog-One's picture

$2 trillion? Pfffft, peanuts! Wake me when the FED says it needs $2 quadrillion just to service the interest. Ho hum. :D

Wed, 05/04/2011 - 11:36 | 1238457 Libertarian777
Libertarian777's picture

will be interesting when we have to import cotton from China to print the wheelbarrows of FRNs. What do we pay them in for the cotton linen?


more cotten linen?

Wed, 05/04/2011 - 11:47 | 1238516 augie
augie's picture

Fuck the cotton, the money is in wheel barrows. How else do you expect people to cart around all that cash?


that is totally the new saying:

"bulish for wheelbarrows."

Wed, 05/04/2011 - 11:49 | 1238543 101 years and c...
101 years and counting's picture

you're both wrong.  no cotton linen needed.  just a shitload of 0's on a laptop.  that is a lot of memory!  INTC bullish!!!



Wed, 05/04/2011 - 11:54 | 1238591 augie
augie's picture

lol bullish for binary.

Wed, 05/04/2011 - 11:30 | 1238408 lynnybee
lynnybee's picture

" DEBT CAPACITY "  ......... so that's what it's called !  Debt Capacity !    why don't they just say the truth ...... borrow more money from the bank that we will never be able to repay & allow the FED to suck up our blood in interest so they can live !

Wed, 05/04/2011 - 11:28 | 1238414 cxl9
cxl9's picture

So what's the real game, then? They say they need $2.0T and then, after much pulling of hair and gnashing of teeth, compromise and settle for $1.5T? And then claim they cut the debt by a "whopping $500 billion!!!!"


Wed, 05/04/2011 - 12:43 | 1238868 HoofHearted
HoofHearted's picture

I'll go long on that prediction. Anyone know how to get in on that action?

Wed, 05/04/2011 - 11:43 | 1238419 blindman
blindman's picture

Dr. Steve Pieczenik: Bin Laden, The Oswald Like Patsy Died 10 Years Ago! 1/7
hear this!
what is the voice of the people? when will it be heard?
the psyop resurrection

Wed, 05/04/2011 - 11:31 | 1238431 topcallingtroll
topcallingtroll's picture



(now i really am off on vacation to the original banana republic. Costa rica)

Wed, 05/04/2011 - 11:34 | 1238436 lieutenantjohnchard
lieutenantjohnchard's picture

as mentioned the financing needs must go on. checks gotta go out to extend the welfare state so that jpm can make money off the food stamp program.

so tptb push back hard on silver and gold, run the stops, buy back their shorts and then take delivery on silver and gold.

does anybody really doubt that tptb would like nothing better than to own all the silver and gold, then the printing can go to infinity with minimal effect on them personally.

Wed, 05/04/2011 - 12:20 | 1238723 LoneCapitalist
LoneCapitalist's picture

"from my cold dead hands"

Wed, 05/04/2011 - 11:34 | 1238438 FreeNewEnergy
FreeNewEnergy's picture

Larry Kudlow actually said this once: "You can't borrow your way to prosperity."

Even a broken clock is right twice a day.

Wed, 05/04/2011 - 12:06 | 1238643 disabledvet
disabledvet's picture

well "he is on twice a day."  what if he's a "clock that works?"

Wed, 05/04/2011 - 13:03 | 1238853 Zero Govt
Zero Govt's picture

the correct saying is "No country in history has ever borrowed, spent or printed its way to prosperity"

Now run those 3 wise historical nuggets past the 3 policies Washington are following.

'Houston, it appears Benancubus, Timshit and Obumsnake have problems!!!'

Wed, 05/04/2011 - 11:35 | 1238446 Catullus
Catullus's picture

I can't wait until we turn into Greece where we "discover" our debt situation is much worse than previously stated. $trillion better get us to the end of 2012. It would look really bad if it only got us to august or September in the middle of an election cycle. They might have to pull the MAD lever again and let everyone's 401k tank another 30% to convince them to keep doubling down on this donkey show.

Wed, 05/04/2011 - 11:33 | 1238456 apberusdisvet
apberusdisvet's picture

Donations please.  Contribute money to plan a seal raid on the Federal Reserve/Treasury; Bernanke and Geithner would look great with a third eye.  Burial off the NE coast of Japan.

Wed, 05/04/2011 - 11:51 | 1238527 TruthInSunshine
TruthInSunshine's picture

Authorize a SEAL Team 6 raid on The Federal Reserve, New York Branch, extract all members and incarcerate them for sedition, compel The Ben 'Any Alleged Inflation is Transitory & We Want a Strong USD' Bernank & The William 'iPad2 Tastes Great!' Dudley to walk the plank in the seas off Jekyll Island.

Wed, 05/04/2011 - 11:35 | 1238464 Cassandra Syndrome
Cassandra Syndrome's picture




Wed, 05/04/2011 - 11:38 | 1238465 pods
pods's picture

Should have announced this one Monday morning.  Seems 2 trillion coincides with something big.  
Remember when Rummy announced that the Pentagon lost 2 trillion?

Things might be going boom real soon.


Wed, 05/04/2011 - 11:40 | 1238475 lieutenantjohnchard
lieutenantjohnchard's picture

i'll admit it. i wish i had the courage to convert my entire net worth to gold and silver.

the situation in the usa is as clear as it can be in my eyes. the ponzi must go on. the minute it stops a whole lotta bad stuff is gonna happen.

Wed, 05/04/2011 - 11:54 | 1238488 JW n FL
JW n FL's picture

can someone go back and quote me for the "FED can't go 3 weeks" and silver will go back up! I bought at $41 yesterday I will buy at $40 today..


I wonder if I can get part of the $2 Trillion in funds and and shift it over into some tangibles? signatory!!!!


Wed, 05/04/2011 - 11:52 | 1238578 JW n FL
JW n FL's picture

did i say $40? I meant $39!

Wed, 05/04/2011 - 12:54 | 1238920 Zero Govt
Zero Govt's picture


It appears either the establishment have reasserted their authority (it was embarrasing Desperation Ben and his Fraud Rammed Nothings) or too many private investors, who were the main fuel of the surge, decided to take profits

this move could go to $38.50 but the CNBC mill today mentioned $32.50-$34.00... rest assured it'll be scaling the heights again soon enough

Wed, 05/04/2011 - 14:43 | 1239579 JW n FL
JW n FL's picture

I will buy every day it goes down..


but the real price, in hand from a direct Mint...

12. Rechant Percious Metals
1730 South Congress Ave
W Palm Beach, FL 33406


and they are $5.50 - $6.50 over spot (Certified Check - Cash) for Silver..


I did steal a couple 1986 Proof Golds though for $1,750 per..  STOLE THEM or more accurately I was gifted them by a nice family who felt bad about the silver prices for me.. $2,400 - $2,700 retail.

$22,910 a Monster Box.. $45.82 on a $39.32 spot day..


Once again, from yesterday.. Backwardation is a polite way to describe a $1 - $2 dollar difference.. when you are paying $5.50 - $6.50 over.. on a $39 product that is.. 2% premium plus 4% backwardation? so the backwardation is 200% the premium? thats fucking disconnect.. NOT! Backwardation!


I guess when its $10 - $20 dollars then it will be 25% and then people will really start to listen?? do yourselves a favor and buy low to sell high.








Even if the Disconnect / Backwardation makes you take notice! Premiums work both ways! selling and buying!

Wed, 05/04/2011 - 15:55 | 1239861 RockyRacoon
RockyRacoon's picture

Buy locally only if your state does not have a sales tax.  Otherwise, contact a national dealer.  Compare shipping costs to sales tax ... then decide.

Wed, 05/04/2011 - 16:49 | 1240155 JW n FL
JW n FL's picture

I agree.. I like being able to walk in and see the guys.. plus they have Pirate Treasure! real stuff! which means it not very pure, but its still Pirate Treasure!


Pirate Treasure are maybe my most favorite 2 words! just fun to say and even more funner to think bout'!


I would also say, please make sure your dealer is direct to the Mint so that they have to follow some kind of rules and NOT spear you! My guys here do not do anything out of area they are only in store. So unless you live here in Palm Beach or maybe South Florida.. they will Not work for you.


But here is the list from the Mint! so you dont get charged 3 - 4 - 5 times removed from who is direct! or buy direct from the Mint!


16% Backwardation or Disconnect is a BITCH!!!



Wed, 05/04/2011 - 11:40 | 1238490 Jovil
Jovil's picture

Check out how gold compares with other assets in John Exter's Pyramid of Assets.

Wed, 05/04/2011 - 11:42 | 1238491 Luther
Luther's picture

He was born on the fourth day of July
So his parents called him Independence Day
He married a girl named Justice who gave birth
to a son called the Nation then she walked away
Independence would daydream and he'd pretend
That someday him and Justice and Nation would be together again
But Justice held up in a shotgun shack, wouldn't let nobody in
So a Nation cried

Wed, 05/04/2011 - 11:42 | 1238506 GNH
GNH's picture


"112% of GDP", or 12%?

Wed, 05/04/2011 - 11:51 | 1238550 mynhair
mynhair's picture

112% is total public debt, I believe.

Or total debt subject to limit.

Wed, 05/04/2011 - 11:46 | 1238512 Alex Kintner
Alex Kintner's picture

Why aren't SERIOUS PEOPLE saying "Stop the POINTLESS WARS now!!" We can no longer afford to have the MIC leech sucking hard on the taxpayers jugular vein.

Wed, 05/04/2011 - 11:55 | 1238581 Rogerwilco
Rogerwilco's picture

Yes, you can certainly do that. End the wars, close the foreign bases, cut DoD spending by $400B or so. Now what do you do with the $2T hole that puts in GDP? The people who run the military-industrial complex are not fools. Our relationship with them, for better or worse, is simbiotic now.

Wed, 05/04/2011 - 12:25 | 1238750 I am a Man I am...
I am a Man I am Forty's picture

have a halfway fucking decent world to live in

Wed, 05/04/2011 - 12:43 | 1238865 Alex Kintner
Alex Kintner's picture

Thank you for stating the obvious to the clueless.

Wed, 05/04/2011 - 13:00 | 1238971 Zero Govt
Zero Govt's picture

the obvious and simplist retort to "stop the MIC" sucking on citizens veins is stop paying tax

no pitchforks required, just a simple social protest, telling the parasitical scum at the IRS to go fuk themselves

about 1 to 2 million taxpayers would do the trick of triggering the whole parasitical eddiface of fraud to collapse is the key 

Wed, 05/04/2011 - 13:09 | 1239019 Alex Kintner
Alex Kintner's picture

Barter on -- Zero G. I'm with ya.

Wed, 05/04/2011 - 17:53 | 1240542 FreedomGuy
FreedomGuy's picture

I agree. But like the mafia they single us out and make an example for the rest. Metaphorically, they will cut your financial head off with an audit and hang it on a stake for all others to see...unless you are the head of the Treasury, of course. He's part of the mob, now.

I would also like to say, "No Social Security, thank you. I will invest my own retirement funds." You can tell them to pay the current recipients out of that huge pile of bonds they have on their accounting sheets. It should last a long time. Of course, that would expose the obvious ponzi scheme that it is.

Could we say "No!" to Medicare, income redistribution, crop subsidies, etc? No, we cannot because in fact it is tribute to our imperial government. It is not our money, in reality and we cannot say where it goes, even for our own benefit. We are a centrally planned and managed economy and we are seeing the result.

Even the investing is done in a "political economy" where we hang on every word of the Fed, Congress, the Treasury and others in government. We invest based not on value or projections of performance but exclusively by what the government will do and who wins and loses in those schemes.


Wed, 05/04/2011 - 12:00 | 1238612 JW n FL
JW n FL's picture



The FED does NOT! listen to us.. the best we can do is front run the mistakes made in Tangibles.. either way the tangibles will hold value.. inflation or de-flation. that is where you want to store your winter seeds.. now if you can afford to trade beyond that and gain ground in the paper markets, to buy more tangibles.. GREAT!


But you better be prepared for the storm coming, and tangibles you cant eat or shoot. So be a Fucking Boy Scout Brother! or you will feel pretty fucking bad later!

Wed, 05/04/2011 - 12:22 | 1238727 Miss Expectations
Miss Expectations's picture

These photos of "Weekly Groceries from Around the World" got me thinking that I'm pretty sure I don't have enough socked away:

Wed, 05/04/2011 - 14:55 | 1239621 JW n FL
JW n FL's picture
That was a FANTASTIC! LINK!! Thanks for Posting it! I Tweeted it! We all should be Thankful! for what we have and for being able to prepare, some if Not! Most!! will not have the luxury of prepping the way we do.. "We the People" are Really! Blessed!! even though we have "The FED Cancer"! We can treat the disease and survive.. and even while fighting the Cancer "We the People" can maintain a better quality of life than most others. "We the People" should feel Great! becuase someone up there does really like us a whole lot more than we deserve!  James Workman you will NOT! believe your eyes! MUST! SEE! PICS!
Wed, 05/04/2011 - 12:21 | 1238691 samsara
samsara's picture

Why aren't SERIOUS PEOPLE saying "Stop the POINTLESS WARS now!!"

Ah, but people ARE starting to say we can't afford these wars.

Ron Paul just got into the race for 2012.   He will be pushing HARD to stop the wars.


Hmmm.   Ron Paul coming on the airwaves(2012 etc).   People starting to say we can't afford these wars.....

and RIGHT THEN,   OBL taken out.    

This point will be used like a 2x4 against the head (in the coming election race)  to ANY candidate that talks about cutting back on Defense(ie WAR) spending.

So maybe it wasn't a coincodendal timing of OBL being taken out(for the 10th time).

Wed, 05/04/2011 - 11:46 | 1238514 Zymurguy
Zymurguy's picture

Isn't there a historic precedent regarding the 112%-113% of GDP mark that has sunk past societies when they crossed that threshold?

(dang this math captcha is hard!)

Wed, 05/04/2011 - 12:01 | 1238632 mayhem_korner
mayhem_korner's picture

90% is the threshold.  This one's going on longer because it's the reserve currency for 64% of the world...strike that, 63%...I mean 62%...

Wed, 05/04/2011 - 11:43 | 1238515 TruthInSunshine
TruthInSunshine's picture

Borrow to prosperity and profit, bitchez!...

...say Geithner, Obama, Bernanke, and every two bit Republican & Democrat circle jerk hack.

Wed, 05/04/2011 - 12:40 | 1238741 hedgeless_horseman
hedgeless_horseman's picture

My favorite video of Congressman Pete Stark starring as a circle jerk hack in Borrow to prosperity and profit, bitchez!

No Jans were harmed in the filming of this interview.

Wed, 05/04/2011 - 12:47 | 1238891 TruthInSunshine
TruthInSunshine's picture

What a total asshole.

I knew a 'respected' doctor who was, in reality, absolutely incompetent, and who reacted the same way Stark did at the end of that video when he was called out his incompetency by another despite his attorney's admonitions to him to sit down and shut up.

When some people find out they're trapped by what they thought were smooth and winning lies, they lash out in the extreme.

Wed, 05/04/2011 - 11:46 | 1238529 John Law Lives
John Law Lives's picture

Print and spend.  What a combination...

Wed, 05/04/2011 - 11:51 | 1238552 Jim B
Jim B's picture

Only 2 trillion, for now!....  LOL

Wed, 05/04/2011 - 12:32 | 1238777 Miss Expectations
Miss Expectations's picture

Timmay was born in 1961.  So, in 1966 or so he was probably begging his father for $.25 to buy and ice cream from Good Humor:

Now he's up to $2,000,000,000,000 so he can destroy the planet.  Wow!


Wed, 05/04/2011 - 13:09 | 1239012 rufusbird
rufusbird's picture

See how well QE1 and QE2 worked?... What could go wrong?

Wed, 05/04/2011 - 11:49 | 1238559 FreedomGuy
FreedomGuy's picture

You know, these numbers are so astronomical that they begin to numb the mind. I think we will almost become desensitized to them and become helpless. If you had posed these numbers when I was a younger adult in the 1980's you would have been laughed at, derided or conversely labeled as treasonous. How can Geithner even ask for such sums without tears in his eyes? How can Congress not just go silent for a moment as they contemplate the magnitude of the problem? This is economic Pearl Harbor if you ask me.

We may be proving that a democratic republic, at least as we have designed it cannot work economically. Wasn't it Ben Franklin who coming out of the Constitutional convention said, "We've given you a republic if you can keep it?" Looks like we may fail even with the safeguards they wisely put in our founding document.

This is a sad day and bad omen for America. I hope this makes headlines.

Wed, 05/04/2011 - 12:38 | 1238822 JohnG
JohnG's picture

"How can Geithner even ask for such sums without tears in his eyes? How can Congress not just go silent for a moment as they contemplate the magnitude of the problem?"


Because they are sociopaths.  All of them, except perhaps Ron Paul.

Wed, 05/04/2011 - 17:54 | 1240565 FreedomGuy
FreedomGuy's picture

Actually, I think most of them are self-absorbed idiots. Absolute, freaking, know-nothing, self-agrandizing idiots in the most venemous way I can say it. Yet...they usually get reelected.

Wed, 05/04/2011 - 11:52 | 1238562 FreeNewEnergy
FreeNewEnergy's picture

What most people fail to understand is that TPTB have changed the narrative, by the very subtle timing of taking out OBL. That event is/was designed to foment a number of changes, some of which have already occurred.

Silver (and other commodities) got whacked.

Obama is now seen as a decisive leader (by the media and the sheeple) unafraid to use guns.

The stock market is taking a dump.

Bonds are rising, great for all manner of debt service.

Timmah actually rolled back the clock on the debt ceiling increase to give the banksters time to unwind the stock market bubble gradually.

So, where is this heading?

Austerity is coming. This is the only logical outcome. While nobody will call it anything even approaching a quasi-depression, that's what's got to occur in order to clear the books of all the nasty debt out there. The top gov officials are quietly telling the Bernanke that his plans are not working. That's so obvious only a moron would say it isn't so.

The narrative has changed. Tea partiers in the House will flight tooth and nail over every penny of debt increase.

Was it coincidence that OBL was taken out (not really, but let's play along) the same moment gas prices were about to hit the national average of $4.00 - the tipping point?

Money was made on the way up, now the criminals will make more on the way down. We will all be asked to sacrifice and share, except Jaime and Vikram, of course.

It's all a dog and pony show, but very effective at keeping oligarchs safe in their mansions with their billions. The average Janes and Joes just get fleeced from a different direction.

Wed, 05/04/2011 - 13:23 | 1239103 Catullus
Catullus's picture

I like the thinking, but I'd suggest there are more players involved or those who are going to call for austerity don't think it will be their sector. As much as I despise foreign affairs, the amity shales article is yelling you what the regime is reading. It's worth a read if for nothing else to get an understanding of what the government will need to react to.

Wed, 05/04/2011 - 14:55 | 1239634 narapoiddyslexia
narapoiddyslexia's picture

Where is that article? thnx

Wed, 05/04/2011 - 11:56 | 1238590 tahoebumsmith
tahoebumsmith's picture

Extend and pretend...Bawahahaha  Now they only need another 2 trillion to carry us through 2012? Hahaha What happened to the pay as you go plan?

Looks like this will be at about  17T by the time you run for re-election, That's means you have doubled the debt in 4 short years!!! DOUBLED.. Keynesian geniuses

Tick,tock,tick,tock........ Oh but the good news is the recession ended back in May 09...LOL

Wed, 05/04/2011 - 11:56 | 1238603 DavidC
DavidC's picture

$2 trillion in 2012, $3 trillion in 2013...yes, I like that, just have the debt as the last digit of the year!

Oh, wait, that would take it back to $0 in 2020 - no, that's not going to work...


Wed, 05/04/2011 - 12:04 | 1238644 TruthInSunshine
TruthInSunshine's picture

Only when Americans demand that the government default on its "obligations" to the Federal Private Reserve Bank of New York, and demand that we'll never allow a private bank to control our money supply let alone charge us interest on it, will I believe there is any reason for hope.

Until then, prepare accordingly.

Wed, 05/04/2011 - 12:04 | 1238650 alexwest
alexwest's picture

2TRLN $$$$$$$$

and calculate average / qrt / year funding?????

feb 2011 stats (before debt games by treasury)

average debt per month (latest 12 months) was 145 bln...
year debt was 1.75 trln$
overall debt was 14.194 trln$

#2 federal taxes runninG about up +5% (about 2.1 trln), but SS taxes are negative (hello new jobs ???), federal corp taxes flat last qrt y/y, federal income taxes are higher cause its all stock market gainst.. (2011 will be different), so in best scenario recepits are up by +100 bln

#3 BUT FUCKING 3.8 TRLN BUDGET'S OUTLAYS ARE up around 2-3% y/y, any gains will be crossed out..

so lets assume Treasury dont need money until Jun 2011, then debt hike, so 2 tlrn $ goes as long as next
june/july 2012.. but there're 6 month more in 2012..

SO TREASURY BLUFFING.. it need at least 2.6-2.8 trln until end of 2012


Wed, 05/04/2011 - 13:14 | 1239041 rufusbird
rufusbird's picture

Excellent. thanks for laying that out. It will be worth it to walk through that problem to make it sink in.Thanks!

Wed, 05/04/2011 - 14:57 | 1239637 JW n FL
JW n FL's picture
by alexwest
on Wed, 05/04/2011 - 12:04




Kudos!! Alex!!! KUDOS!!!! Great job and wonderfuly simple, so simple I could understand it! Fantastic!

who was it that said Mexicans cant type or use calculators?


Wed, 05/04/2011 - 12:12 | 1238679 disabledvet
disabledvet's picture

I think you have it backwards--"Congress asks the Treasury for a 2 trillion debt ceiling increase."  What's on The Agenda I wonder?

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