• Tim Knight from...
    04/28/2016 - 00:27
    I was expecting a few boring candidate statements of the U.S. Senate - AKA the World's Most Exclusive Club - but, boy, was I wrong. Just take a look at some of these gems.
  • Tim Knight from...
    04/28/2016 - 00:27
    I was expecting a few boring candidate statements of the U.S. Senate - AKA the World's Most Exclusive Club - but, boy, was I wrong. Just take a look at some of these gems.

Treasury Warns Default Impact Could Last A Generation

Tyler Durden's picture




 

The President warned yesterday that "this time is different," and now the Treasury has weighed in with an even more ominous warning. In their statement, they note:

  • *TREASURY OFFICIAL: CONGRESS ACTION ONLY WAY TO AVOID DEFAULT
  • *TREASURY SEES 'TENTATIVE' SIGNS IMPASSE AFFECTING MARKETS
  • *TREASURY SAYS BILL YIELDS MAY REFLECT `NASCENT CONCERNS'
  • *TREASURY: DEFAULT IMPACT COULD BE PROFOUND, LAST A GENERATION

And so it seems not only are they looking at the same indicators as the smart money in the markets but it is clear that the rhetoric will be increased until the equity market cracks and the politicians get their catalyst to act.

Via The Treasury,

The United States has never defaulted on its obligations, and the U. S. dollar and Treasury securities are at the center of the international financial system. A default would be unprecedented and has the potential to be catastrophic: credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.

Full Treasury Statement can be found here.

What is amusing among all this blatant fearmongering, is that the Treasury can clearly choose to prioritze its payments and have more than enough cash from tax revenues alone to fund its debt obligations for a long period of time, even if that means not paying some of the government's other ultrabloated programs.

From: Treasury "X Date" May Hit As Soon As October 18.

Priotiziation, or selective payment of obligations.

It would be as follows:

  • If we reach the X Date, Treasury might either prioritize payments or make full days’ worth of payments once they receive sufficient revenues to cover all of a day’s obligations.
    - Interest on the federal debt would likely be prioritized in either scenario – it is paid on a separate computer system (FedWire).
  • Scenario # 1: Pay some bills, but not others
    - Treasury might attempt to prioritize some types of payments over others. Prioritized payments would be made on time, others would not.
    - This option may not be possible to implement using Treasury’s current financial systems. It would involve sorting and choosing from nearly 100 million monthly payments.

If the X Date arrives on October 18 (the beginning of the BPC range):

  • Treasury would be about $106 billion short of paying all bills owed between October 18 and November 15 (20 business days).
  • Approximately 32% of the funds owed for the period would go unpaid.
  • The reality would be chaotic:
    – Unfair results, unanswered questions
    – Treasury picking winners and losers
    – Public uproar
    – Intense global media focus

  • Scenario # 2: Make all of each day’s payments together once enough cash is available
    - Treasury might wait until enough revenue is deposited to cover an entire day’s payments, and then make all of those payments at once.
    (For example, upon reaching the X date, it might take two days of revenue collections to raise enough cash to make all of the payments due on day one. Thus, the first day’s payments would be made one day late. This, of course, would delay the second day’s payments to a later day.)
    - In the 2012 OIG report, some senior Treasury officials stated that they believed this to be the most plausible and least harmful course of action.
    - Since debt operations are handled by a separate computer system, these payments could likely still be prioritized under this scenario.

Full report from the Bipartisan Policy Center on the debt ceiling contingenies can be found here.

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Thu, 10/03/2013 - 10:26 | 4018173 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

We are fucked one way or the other, jump fuckers. Time to go off the cliff and into the unknown see who is made of what.

Thu, 10/03/2013 - 10:27 | 4018185 Wahooo
Wahooo's picture

Government pretending to be relevant. obama warns himself.

Thu, 10/03/2013 - 10:29 | 4018193 Stackers
Stackers's picture

As opposed to running up multi hundred trillion dollar deficits that will impact multiple generations ?

Thu, 10/03/2013 - 10:33 | 4018209 ZippyBananaPants
ZippyBananaPants's picture

nice tits

Thu, 10/03/2013 - 10:35 | 4018214 hedgeless_horseman
hedgeless_horseman's picture

 

 

From the United States Government:

We NEED moar dope! 

We are dope fiends; we cannot cope without our dope.

We will say ANYTHING to get moar dope.

Thu, 10/03/2013 - 10:36 | 4018230 Joe Davola
Joe Davola's picture

Redundant, moobs above already mined this topic.

Thu, 10/03/2013 - 10:50 | 4018307 Cognitive Dissonance
Cognitive Dissonance's picture

When this money tide goes out nearly everyone will be found swimming naked.

<Got milk PMs?>

Thu, 10/03/2013 - 11:04 | 4018418 DaddyO
DaddyO's picture

I can safely sum this post about our wonderful Treasury up in a word...

Bullshit!

Doesn't the word "treasury" summon visions of a room full of bountiful loot?

Goonies, anyone?

WTF, Over!

DaddyO

Thu, 10/03/2013 - 11:17 | 4018490 SafelyGraze
SafelyGraze's picture

"Treasury Warns Default Impact Could Last A Generation"

as maw-maw used to scold us, "you boys should have thought of that before you borrowed all that money for hookers and blow"

that maw-maw!

Thu, 10/03/2013 - 11:22 | 4018507 HoofHearted
HoofHearted's picture

The sooner we get this default shit over, the sooner we can start to rebuild. Just do it already. Stop threatening. Shut your piehole and let slip the hogs of war. Bring it, bitchez. Bring it. 

Those candy asses will find some way to continue this game. They can't handle the TRUTH!!!! We're already there as far as default goes. We just call it "inflation" instead.

Thu, 10/03/2013 - 12:02 | 4018691 The Alarmist
The Alarmist's picture

Did someone tell DHS that T is engaging in t'rism???

Thu, 10/03/2013 - 12:25 | 4018809 smlbizman
smlbizman's picture

cant they just take a heloc on the white house et.als, or open up credit card accounts in 57 different states with identity theft.....isnt that why they met with the big boys yesterday, doing a loan app with a black guy...{yeah right}....showing him to go greece and nobody will ever find out.....looking at u bama...you know, dont u....how 'bout dem sewr bills...

Thu, 10/03/2013 - 11:05 | 4018421 Rubbish
Rubbish's picture

This looks doable.

 

And yes, I got some PM's

Thu, 10/03/2013 - 11:11 | 4018459 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

Here's what I find so interesting about this:

 

From Greece to Ireland to Mexico in the 90s etc etc etc, govts always vehemently deny they are about to default or devalue their currencies.  The theater always starts out with whispers in the press which officials refuse to even dignify at first and then when they can no longeravoid dealing with the rising tide of questions they go on tirades about how ridiculous it is to even suggest default is possible.  Then a day or so later they default or devalue...

 

For the president, the Treasury and the heads of the major banks to come into the press screaming that the US is "THIS FRIGGEN CLOSE" to defaulting proves that there is practically no risk at all of default on the kind of time horizon they are contemplating.

 

So what are they really up to?

Thu, 10/03/2013 - 11:16 | 4018470 Anusocracy
Anusocracy's picture

To keep the con conning and the dupes duped.

Thu, 10/03/2013 - 11:29 | 4018541 Joe Davola
Joe Davola's picture

"Fire" in a crowded theater when you're the beneficiary of the patron's life insurance policies.

Thu, 10/03/2013 - 10:52 | 4018322 Manthong
Manthong's picture

..amazing how much money there is for putting barricades up to block the public from public spaces.

We feel their pain.

Thu, 10/03/2013 - 10:54 | 4018325 The Phu
The Phu's picture

I'm 30 years old.  My peers, the Millenials, helped to elect Obuttfuck's "hope and change" agenda.  That being said, Congress/TPTB/President have clearly demonstrated they could give a rat's ass about my generation.  So, Mr. Treasury official (*TREASURY: DEFAULT IMPACT COULD BE PROFOUND, LAST A GENERATION), please, blow me.

Also making me question the "wisdom" of the Treasury, you have this: "The United States has never defaulted on its obligations..."  That may be technically correct, but I'm afraid that we're also on our fourth or fifth currency: Continentals, Green backs, Gold Standard, Silver standard, and currently post-1971 pure, unadulterated fiat FRNs.  God Bless America, and God Bless our spotless default record!!!  Amen!

 

Thu, 10/03/2013 - 11:05 | 4018417 LawsofPhysics
LawsofPhysics's picture

Kudos to you sir as most of your generation doesn't understand basic math, much less how credit "markets" actually work.

Thu, 10/03/2013 - 11:30 | 4018544 HoofHearted
HoofHearted's picture

Cue Sam Kinnison here...

http://www.youtube.com/watch?v=Fj5k6toS7i8

"We like your style" here. We'll be watching you. Keep it up.

Thu, 10/03/2013 - 11:38 | 4018578 XitSam
XitSam's picture

My 27 year old co-worker asked my yesterday how long the shutdown would go on. He thought it would be for a set number of days. 

Thu, 10/03/2013 - 11:42 | 4018590 Miffed Microbio...
Miffed Microbiologist's picture

Dear Phu, for your sake and my 21 and 23 year old daughters sake, I pray this goes down. Ultimately, your group has the greatest chance to recover if it does soon. At 52, I'm going to take a hit but I'm actively prepping to survive it. Otherwise, your generation's backs will be crushed carrying this debt burden, something you did not cause or deserve. I hope you can plan and prep to survive it and get a few of your peers on board that are willing to listen. Please know there are many tail-end baby boomers like me pulling for you and have your best interests at heart. Best of luck.

Miffed;-)

Thu, 10/03/2013 - 11:59 | 4018674 Bananamerican
Bananamerican's picture

ditto.

and if the choice ever comes to either kick our asses to the curb or survive...do it.

PS

start with the BMw drivers if you would

Thu, 10/03/2013 - 12:10 | 4018715 DaddyO
DaddyO's picture

Miffed has summed up where a lot of us in her age group find ourselves.

I have been preparing to weather an inevitable sh*tstorm of financial chaos for quite a few years. However the FED has been able to put off the storm through all sorts of financial skullduggery.

I have tried to raise my children to be aware of the coming slide into oblivion and live outside the system as much as possible.

I too, feel for all the millenials who are being crushed by this and aren't even aware of what's happening. They are really up on how to operate an iPhone but couldn't operate a wheat grinder if their life depended on it.

Many, many everyday survival skills have been lost due to our dependence on a JIT lifestyle and food delivery system. Woe to the millenials because of it...

DaddyO

Thu, 10/03/2013 - 13:26 | 4019151 Miffed Microbio...
Miffed Microbiologist's picture

In my experience Daddyo, the 50-55 group seems to be more awake than the older group. In the last 3 months I've had 2 people ask me if my house could be a secondary bug out locale (remote, up in the mountains, very defensible with a great well with a 10k gallon cistern) both presented skills they could add to mine (exmilitary, great hunters). I readily agreed.

A few weeks ago another person at our shooting range invited me and my husband to join his militia he was forming. I'm actively setting up bartering groups with people with skills or items I lack. In essence, I'm a community organizer of a different sort! All these people are 45-55.

Now the 60+ group seems to be just concentrating on their mythical retirement. All I here about is the number on a piece of paper that states what they will be receiving from their pension and all the wonderful cruises and vacations they will be taking. I once ask one how they knew that number had any validity. Blank stare. Then the inevitable " i was promised this."I almost told them they should study Neville Chamberlain to learn the value of paper but that would have violated my " be less of an asshole" New Years Resolution.

The amount of work and effort I have done the last few years have been staggering. I don't know what one could really do to adiquately prep if there are only months than years left. I'm taking an herbology class to learn how to make my own medicines. Come to find out there are many local plants in my region that have medicinal properties but there is a lot of learning for me to know how to properly extract and prepare them. My teacher told me it will take me 2-3 years of work to become proficient. My professional skills will be worthless if we go down. I pray I have enough time!

Miffed;-)

Thu, 10/03/2013 - 13:51 | 4019256 Sean7k
Sean7k's picture

Miffed, as a herbalist, I can tell you that 2-3 years is pretty ridiculous. Can you do a simple alcohol extract? These extracts last five years. You can learn how in ten minutes, though it requires about $125.00 in glassware. If you have questions:

Principles and Practice of Phytotherapy by Mills and Bones.Is a good all around resource.

Thu, 10/03/2013 - 15:19 | 4019715 Miffed Microbio...
Miffed Microbiologist's picture

Actually Sean, I decided to go the hardcore "certification"route because I'm interested in possibly developing a practise. Because of my background I'm confident I could learn to make infusions, decoctions and tinctures to standard and learn therapeutic doses. However I need to learn a lot of plant identification for wild crafting. Because I work full time the best I can manage is 1 three hour night class a week and a full day Sundays for herb walks. Otherwise I could finish his course list in about 8-10 months before I learned clinical. If I was only thinking of personal use it certainly wouldn't take as long. There is certainly a plethora of information out there for anyone to learn the basics if so inclined.

Miffed;-)

Thu, 10/03/2013 - 16:47 | 4020233 Sean7k
Sean7k's picture

Then, that is about the time for a full program, though there are others that are doable in 12-18 months and are certified. If you don't know them, mountain rose herbs is a good organic source. Best of luck!

Thu, 10/03/2013 - 12:46 | 4018959 OldE_Ant
OldE_Ant's picture

I will third the sentiment.  Many of us out here are creating habitable/sustainable zones NOW for not just decades to come but generations to come (i.e. even after I am ashes in the winds).  But they are going to require real people doing real things to sustain them, keep them at peak production.

I have to tell a story though regarding the Z+ generation.  While some of you have your shit together (i.e. some hard working go getter visionaries - mostly deBOXed) 98% of you are so absorbed by the 'digital screen' (da Box) there is nothing else other than the virtual world.  I have never seen a generation so absorbed by the 'BOX'.   No-one else matters except who is at the end of your virtual line.  Mommy and daddy still wipe your ass and feed your pie holes as well as pay for internet and cable.  Someday they and their houses won't be there for you.

GET YOUR HEADS OUT OF THE BOX and ENTER THE REAL WORLD.  REAL PEOPLE, PLACES and things WILL BE, AND ARE more important that the BS in the BOX.  You can't eat virtual pizza.  You can eat a real apple or tomato and if you never have had a fresh tomato off a plant midday - you have never had a tomato.!

Learn how to grow a home garden, even if in a box.  Start bicycling places.  Hell find someone who has horses and shovel some shit for a while.   Learn to make and fix things (anything useful).  Actually do something other than live your life in the 'BOX' otherwise you too will be plowed by what is coming.  The time is now to get your systems and support networks up and running, learn tradable skills.  Wait until the horn sounds for the race and you will be too late.

You have been aptly warned.

Thu, 10/03/2013 - 10:46 | 4018284 earnyermoney
earnyermoney's picture

That's why Barry had the dope syndicate at the W.H. yesterday.

 

 

 

Thu, 10/03/2013 - 10:55 | 4018305 fockewulf190
fockewulf190's picture

No more financial crack!  Scrape your pipe for the final high and go suffer the detox.  Only through pain can the lesson be learned.

@HH,

"We NEED moar dope! 

We are dope fiends; we cannot cope without our dope.

We will say ANYTHING to get moar dope."

Soon you´ll hear "I´ll suck your dick!"
Thu, 10/03/2013 - 10:50 | 4018299 Manthong
Manthong's picture

So.. the future generations have student debt up the wazoo, can’t get a decent job, can’t afford a house and have to live with mom and dad.

So tell how much worse can it get for them?

I’d consider learning Portuguese and moving to Brazil.

Thu, 10/03/2013 - 10:53 | 4018329 Eeyores Enigma
Eeyores Enigma's picture

Why is SS listed on there? It is fully funded and not a Gov expense, unless he is talking about the interest Gov should be paying for all the money they have "borrowed" from SS.

This post is looking like BS propaganda.

 

Thu, 10/03/2013 - 11:20 | 4018502 I Write Code
I Write Code's picture

If you think SS is "fully funded", gimme some of what you're smoking I wanna be happy too.

Thu, 10/03/2013 - 10:59 | 4018370 markettime
markettime's picture

There is no chance they are going to let the debt ceiling be breached. But this is a perfect opportunity for them to start demonizing small government believers and holders of PM's. They are going to label these groups as financial terrorists who want to bring down the dollar. It is going to be spun to try and make those who are trying to be responsible the enemy. 

Thu, 10/03/2013 - 11:25 | 4018530 Stoploss
Stoploss's picture

"*TREASURY: DEFAULT IMPACT COULD BE PROFOUND, LAST A GENERATION"

 

oh, so we already have one lost generation, is this the second or third one??

WHAT DIFFERENCE DOES IT MAKE AT THIS POINT!!????

Thu, 10/03/2013 - 11:50 | 4018627 Miffed Microbio...
Miffed Microbiologist's picture

This whole thing reminds me once when we were driving to Disneyland when the kids were little and they were whining constantly "Are we there yet?". Finally you just have enough and you scream " The next word I hear out of either of you we're turning around and driving home!". And the rest of the trip is in peace. Empty threats work well on the ignorant.

Miffed;-)

Thu, 10/03/2013 - 10:54 | 4018227 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Funny you mention that because this may not be hundred trillion dollar deficits but the mindset of running debts you ultimately can't pay off without fisical prudence while always expecting someone else to pick up the tab is illustrated here.

http://www.opposingviews.com/i/politics/2012-election/democratic-nationa...

According to the Democratic National Committee’s latest finance report, the committee is struggling to pay off its debt from the 2012 election.

After last year’s elections, the DNC was $20 million in debt. 10 months later, the DNC’s situation is not much better, as they find themselves $18.3 million in debt. In comparison, the Republican National Committee has $12.5 million in cash reserves and no debt. While the DNC managed to raise $3.9 million over the last several months, they spent even more -- $5.4 million – over that same time period.

In a recent piece, CNN writer Tom Newmyer cites several DNC strategists and donors that are worried about the committee’s ability to pay off its debt.

"They really thought they could get this money raised by the summer," one strategist said, "but the fact is, from talking to people over there, they have no real plan for how to solve this."

sums it up.

...

Jump fuckers.


Thu, 10/03/2013 - 11:33 | 4018552 HoofHearted
HoofHearted's picture

So the Free Shit Army isn't ponying up to pay off the DNC debt? Whodathunkit?

Thu, 10/03/2013 - 12:05 | 4018694 Bananamerican
Bananamerican's picture

yup.

but the TBTF banks paid off the RNC tab with a couple days lunch money....

Thu, 10/03/2013 - 10:39 | 4018240 Glass Seagull
Glass Seagull's picture

Yatzee!  Default hurts for one generation, while alternative keeps the debt shackle on for centuries to come.

 

A no-brainer IMO

Thu, 10/03/2013 - 10:39 | 4018248 El Tuco
El Tuco's picture

I can't see, I left my glasses at home. Is that Randy?

Thu, 10/03/2013 - 10:28 | 4018187 SilverIsKing
SilverIsKing's picture

<- No Default

<- Default

Thu, 10/03/2013 - 10:33 | 4018221 Bobbyrib
Bobbyrib's picture

I voted no default, not because I believe that is what is best for the country, but that you would have better odds at winning the lottery. Now is not the time the .gov will choose to default.

Thu, 10/03/2013 - 10:43 | 4018274 CH1
CH1's picture

And every day that don't default declares them to be lying thieves.

Thu, 10/03/2013 - 11:35 | 4018570 HoofHearted
HoofHearted's picture

I voted "no default" because none of the pols in Washington have the balls for it. We'll keep stealth defaulting by inflation. If default here means "inflate away," then I'll change my vote. I think we'll keep trying this inflate away scheme, giggling as long as we can get those suckers to keep thinking that green coupons (or 0s and 1s) are truly valuable. "Dumb asses...they bought it. They really believed us."

Thu, 10/03/2013 - 10:30 | 4018188 SilverIsKing
SilverIsKing's picture

<double click>

Thu, 10/03/2013 - 10:32 | 4018212 depression
depression's picture

POMO  starts in 15 minutes: Ben .vs. Barak

Thu, 10/03/2013 - 10:58 | 4018375 Ban KKiller
Ban KKiller's picture

But...but...the war profiteers. What about them? THEY must be paid!

Actually the war profiteers want chaos...and war and famine, and strife. 

Thu, 10/03/2013 - 10:25 | 4018174 rtalcott
rtalcott's picture

bullshit....sturm und drang...

Do NOT follow this link or you will be banned from the site!