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Presenting America's New Debt Ceiling: $19,600,000,000,000
Even as the bond market has been rather concerned about another possible debt ceiling showdown as we showed before, and which earlier today prompted the Treasury to announce the purposefully dramatic step of postponing the auction of 2 Year Notes next week, the reality is that one way or another, with an equity-driven wake up call for the GOP or without, the debt ceiling will be raised.
The only question is how much.
As a reminder, the reason why the total US debt held by the public hasn't budged from $18.1 trillion since March 16, 2015 is because that is when the last debt ceiling limit was hit. In the seven month since, the US Treasury has been cruising along on emergency cash measures, even as the total debt - if only for reporting purposes - has not budged (in reality it has grown by about half a trillion).
It will budge very soon, because no matter what the outcome of the upcoming week of debt ceiling negotiations, one thing is certain: the US has to be able to borrow more in order to survive.
And as The Hill reported, when one gets beyond the traditional posturing, the outcome will be the following:
The House is expected as early as Friday to vote on a conservative debt-limit proposal even though chances are slim that the plan can pass the Senate.
Speaker John Boehner (R-Ohio) told the GOP conference on Wednesday that he is expecting a vote on the Republican Study Committee (RSC) plan that would raise the debt limit to $19.6 trillion from $18.1 trillion and would run through March 2017.
Who will be the Republican to submit the unpopular measure? Most likely the outgoing speaker John Boehner, who will seal his tenure with this final act: "With only two weeks to go, the pressure is on the House to pass a measure that raises the nation’s $18 trillion debt ceiling amid a search for the next Speaker."
Yes, the republicans will pretend to demand concessions, such as a balanced budet and other "sound money" conditions...
The proposal would require a House vote on a balanced-budget amendment by Dec. 31, would implement a short-term freeze on federal regulations through July 1, 2017, and would compel the House to remain in session without a break if spending bills aren't done by Sept. 1.
... but they won't get them because the corporations pulling the strings of every D.C. politicians are the biggest beneficiaries from US debt-funded largesse, especially if one throws in the occasional contained or not so contained war.
This means another victory for the Demorats who have required a "clean" debt raise. This is precisely what they will get, and why it will have to take place under John Boehner as Paul Ryan would surely tarnish his reputation with the Freedom Caucus if his first act is one seen as submission to the left.
Which means that the only certain outcome from the melodramatic debt ceiling fight over the next several days, is the following: the US is about to have a brand spanking new debt ceiling, one that should last it until March of 2017: $19,600,000,000,000.
If the chart below looks increasingly exponential, that is not a coincidence.
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Which means that the only certain outcome from the melodramatic debt ceiling fight over the next several days, is the following: the US is about to have a brand spanking new debt ceiling, one that should last it until March of 2017: $19,600,000,000,000."
By all means...of course...please do...
m
Better Zero Hedge that number, with all those F'in zeros.
The bond vigilantes are dead.
They seem to be mythical.
Hmmm Houston, we STILL have a debt problem.
See I knew closing our eyes and hoping it would go away wouldn't work.
Just bump up interest rates on that.Even if the increase is to only 1.5%,government will be screaming murder.(not enough taxes)
You negative ZH'ers don't understand modern economics. It's about broke gov'ts selling to other broke gov'ts while the 1%, who now own >50% of the world's wealth, rake in the commissions. But, not to worry, the 1% have promised to bail it all out. They had some sort of nightmare about guillotines.
Very telling graph at the end of the article. The end of the gold standard in 1971 fires the absolute craziness of fiat money. Nothing good can come out of this.
THIS IS SO out-of-control.
I remember when the debt was 10 Trillion, and passing that huge "ceiling" was a big big deal! That was the year 2008 ... ONLY SEVEN YEARS ago. At that time, there were a number of analyses done (e.g. by Bud Conrad) that showed that when the US debt reached $20 Tillion we would enter the beginnings of a serious "downslope". The reason is that the payments on the debt ... the interest payments ... become so large that America just cannot afford its social services and its defense budget.
NOW HERE WE ARE .. Kicking the Debt Ceiling up to $20 Trillion. And we expect to get there in a couple more years.
The people in charge of America are completely destroying this country.
It's a race between debt service and the real economy you are right. It's a dangerous game too, because things can change on a whim for economic outlooks. Things look good, you take on some debt, you buy some pretty new things, you get some votes, things go not so good, you take on more debt and then suddenly you lose your job. You are now officially fucked. This happens to governments too as much as they like to pretend otherwise. Obviously it's hyperbole, but my point is clear.
And those animals are NOT finished. I have no idea how so many minds could be so collectively rotten. It amazes me. It's really bad now. Really bad.
And WE'RE letting them get away with it...
Does it really matter if we default NOW, or is it better to do so at, say, 30 trillion or 50 trillion?
RISE folks!
If the last few years have taught us anything, it's that we're NOT getting better...
m
Am I the only one who would kind of like to see another four years of Socialist rule and see this whole rotten house of cards collapse under the weight of .gov's biggest proponents? Not that the chickenhawks of the Right would be any better, however, at least a couple of them are trying/tried (Dr. Paul).
Dont blame me, I voted for Kodos!!
"The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default" said Greenspan.
https://www.youtube.com/watch?v=q6vi528gseA
As long as someone still wants to buy our dollar...
...beside us.
m
Like $19,600,000,000,000 will ever get paid off, eh.
War, what is it good for?
aside from Banks, I mean?
Aw Fuck it, 30T or bust. Let's make a real statement and show those right wing radicals a thing or 2. It's all amoung the "special" people anyhow.
only 19 Obama Coins.... Pfft I got that in my sofa
Spending $1787842669.8450536352800953516091 per day more then they have.
That's $5.5870083432657926102502979737783 per man, women, child, Illegal alien, and terrorist per day
Do you realize the hand held calculators can't even handle this many digits.
People still do calculations? Who does maff enyway?
I though that was like done by computers or whatever.
/sarcbrojustsarc
I hear the is no bid for long bonds and the Central Banks hold most of the long bonds..........no bid.............no sale.
Boom.
Who cares anymore. The only thing that will stop this is outright civil war or the rest of the world deciding they have had enough and can go it alone. Perhaps one other thing: The complete decimation of 90% of American consumers. I bet on the latter.
The amusing thing is if the entire world erased all of its debt simultaneously.
*drumroll*
The world would still be there...
Talk about being trapped in an unlocked cage of your own making.
"Speaker John Boehner (R-Ohio) told the GOP conference on Wednesday that he is expecting a vote on the Republican Study Committee (RSC) plan that would raise the debt limit to $19.6 trillion from $18.1 trillion and would run through March 2017."
I'll bet a wooden nickel that 19.6T won't make it to the 17-03-01 date.
Bullish!!!
Get rid of credit!
40 T by 2020
This problem will have to fix itself because we are well past the point of an orderly unwind. When that thing turns down we are going to witness an epic economic calamity, one for the ages.
https://www.youtube.com/watch?v=5D5ruUmFRmo
...
Reaganomics set the U.S. on this path, but most Americans are too ignorant of economic history and/or too warped by "conservative" propaganda media to understand. Whatever, too late now.
If you think it started with Reagan, you need to look at history a bit more. It started with Alexader Hamilton in about 1800, hit speed bumps here and there. Almost got derailed by JFK but a bullet later and Johnson put it right back on course. Then Nixon killed the last vestige of the gold standard. Followed by Carter's wonderful mismanagment and ignorance. And you think it starts with Reagan?
https://www.nationalpriorities.org/analysis/2015/presidents-2016-budget-...
Let's see... 2016 budget.
https://www.nationalpriorities.org/campaigns/proposes-2016-us-budget-bud...
And we're not counting the fed's QE4. Isn't this tyler own word?
http://www.zerohedge.com/news/2015-08-28/reason-chinas-crash-will-unleas...
Do you really think 1.5 T$ debt increase would last into 2017??
Bwahahahahahaha...
Real debt of the US is 200 Trillion. Prof. L. Kotlikoff and others.
the 19T is the current debt like for the next few months.
The conclusion of this article doesn't seem to follow.
'Treasury Bonds are most liquid securities', only sky is limit.
Just wait until the social security trust fund starts dumping its $2.8T worth of treasuries... No wonder Yellen had a meltdown.
The Yanks have the best piece of dirt in the world, massive amounts of agricultural land, Oil, Gas and minerals.
The big problem "People"
Stack on stackers. Back off slackers.
Yellen talks shit all day long - US aint never gonna repay shit
Just get rid of your "ceiling" and stop that circus....
so basically the article says that stocks are going to continue to get support for the next year and a half or so. Hope and change there assholes.
We have murdered 54 million children in the womb and openly sell their body parts. The state of Ohio is postponing executions for two years because they can't secure the proper drugs to use in the death chamber.
We have called good evil and evil good and their blood cries out..
America has fallen. When you are on your knees there is really only one direction to look. As a nation we are not on our knees. Look around. Like what you see? Like what our nation has become. Do you like he/she/it bathrooms in your grade schools? How have the mighty fallen.
Return unto me and I will return unto you.
If you owe the bank ten grand they own you. If you owe the bank ten trillion you own them. Quick question. What happens if the bank no longer exists?
Jubilee any one? If every Christian with a job of any kind stayed home from work until Roe V Wade was overturned would it still be in effect.
If my people who are called by my name will humble themselves etc, etc, and cry unto me, etc, etc , I will hear from heaven and I will heal their land.
Are we crying yet? Nah. Didn't think so...... Good weekend to all.