Treasury To Issue $331 Billion In Debt In Fiscal Q4, $660 Billion Gross, Expects Debt Ceiling To Be Raised

Tyler Durden's picture

Tim Geithner has released his projection of expected borrowing needs for the final fiscal quarter of 2011 (ending on September 30). But before that, we learn that while back on May 1 the Treasury had expected to raise $142 billion in marketable debt in Q3, instead if raised $190 billion, with the difference going primarily to build up the EOQ cash balance which instead of being $95 billion, was $137 billion, obviously due to the threat of the debt ceiling breach. That threat however has not prevented the Treasury from assuming that the debt ceiling will be raised without a hitch, and it now predicts issuing $331 billion in net marketable debt issued in Q4, $74 billion less than the projection from May 1 (and further sees another $285 billion in borrowing needs in Q1 2012). In other words, if there is no debt ceiling deal, the Treasury will be $616 billion short in revenues over the next 6 months. Of course, the numbers net out the massive issuance that has to hit the market to fund the "disinvested" government retirement funds and various other mechanism that were used to prevent the Treasury from running out of cash, which amount to about $300 billion primarily in the form of short-term bills that matured and were not rolled over to make space for marketable debt issuance. In other words, gross issuance in the next quarter will be about over $660 billion. This is just a little under the total debt issued in the last 3 quarters (due to the May 16th debt ceiling breach)! And people think the Treasury can raise this money without the Fed monetizing at will? Fascinating.

The full sources and uses table:

And the full release:

WASHINGTON - The U.S. Department of the Treasury today announced its current estimates of net marketable borrowing for the July – September 2011 and the October – December 2011 quarters:

  • During the July – September 2011 quarter, Treasury expects to issue $331 billion in net marketable debt, assuming an end-of-September cash balance of $110 billion.  This borrowing estimate is $74 billion lower than announced in May 2011.  The decrease in borrowing largely relates to lower outlays and cash balance adjustments.
  • During the October – December 2011 quarter, Treasury expects to issue $285 billion in net marketable debt, assuming an end-of-December cash balance of $100 billion.

During the April - June 2011 quarter, Treasury issued $190 billion in net marketable debt, and ended the quarter with a cash balance of $137 billion, of which $5 billion was attributable to the Supplementary Financing Program (SFP).  In May 2011, Treasury estimated $142 billion in net marketable borrowing and assumed an end-of-June cash balance of $95 billion, which included an SFP balance of $5 billion. 

Additional financing details relating to Treasury’s Quarterly Refunding will be released at 9:00 a.m. on Wednesday, August 3, 2011.

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SheepDog-One's picture

What about the $200 billion Treasury has raided from govt pension funds since QE2 end that needs to be put back. That in their projection?

No problem Im sure, hey we got a new 'Super Congress' thats cutting $2 trillion in public spending by fall no one is talking about, all is well, Im sure!! :D

DonnieD's picture

How do you borrow money to fund a retirement account?

SheepDog-One's picture

I dont know, you tell me! Perhaps the $200 billion the Treasury has looted from govt oensions is now a 'line thru item' and no longer exists.

All your retirements are belong to us.

But since QE2 end, Treasury has now 'borrowed' at least $200 billion, and says that will be 'put back' when the debt ceiling is kornholed into the american people, but Ive yet to hear any of them mention the -$200 billion in the numbers!

Cognitive Dissonance's picture

I'm looking forward to the day when we are all talking about the Military Junta or Martial Law. It will make today feel like the good old days.

slaughterer's picture

No Fed monetization needed to sell these Treasuries.  Euro instability will make the world look to US T-Bills for security.  

sdmjake's picture

How about just giving me a nice papercut and pouring lemon juice on it?

dbach's picture

Gold and silver should be on sale in the next few days. Does that make you feel better?

sdmjake's picture

I just keep adding as i can... despite the price. It has worked for the last 7 years and I see no reason for that to change. Buying gold is simply a vote against the current monetary and fiscal policy of my country. Nothing they have done or said leads me to believe that USD responsibility will follow. I'll take the PM cheaper with a smile though!

Cognitive Dissonance's picture

Elvis Logic and common sense, not to mention sanity, has left the building.

sdmjake's picture

"A child of five would understand this. Send someone to fetch a child of five."
- Groucho Marx

MoneyWise's picture

"And people think the Treasury can raise this money without the Fed monetizing at will?"
You mean need QE to monetizing more?

Ricky Bobby's picture

Imperial Collapse! Are we there yet.

Dr. Engali's picture

In the words of Marc Faber: "They will print ,and,print,and print,then they will go to war."

SheepDog-One's picture

Yes war against the american people who are now looked at as enemy #1 to the federal govt which has become a nation unto itself.

Caviar Emptor's picture

When you can no longer afford to pay them, they'll make you work in their salt mines in exchange for a roof and bread. 

Jim in MN's picture

Fed, JP Morgan, People's Bank of China...what's the diff?


No, really, what?

Bansters-in-my- feces's picture

Mister can you spare a dime...?

Can you make it a silver one...???

PulauHantu29's picture

Did Timmy happen to mention the Bank Bailout and CEO Bonus amounts for Q3 while was was fiddling with those Billions?

Caviar Emptor's picture

Did "Free Marketeers" Paulson, Bush and Cheney just say "No" to TARP and other bailouts and stimulus? 

Of course not, don't be ridiculous. 

They knew that would cost their buddies big when half the loans they made would default. 

Clint Liquor's picture

"And people think the Treasury can raise this money without the Fed monetizing at will?"

Some people think Unicorns shit Skittles, also.

Caviar Emptor's picture

Funny how it happens so fast: 

Inside of 1 week the stakes have been raised by double. All of the precariousness of the US and global financial Ponzi has not just been revealed. It has gone further out on a limb. And problems aren't just accumulating, they're compounding. 

And it's not just financial risks anymore. It's domestic and global political and strategic risk. 

And with the stark slowdown in global ISMs and GDPs we have a clear signal that the policies that were put forth in 2008-9 are faltering and beginning to reverse. Only this time we're in a much weaker position than in 2008 when it was just a banking issue. Today, the tentacles of the crisis and the depression have spread out to embrace the entire global economy. And the stakes aren'y just inconvenience and frugality anymore: poverty, famine, uprisings. 

css1971's picture

The Ponzi must be saved. All of your leaders owe their fortunes to it.


P Rankmug's picture

Jonesing Timmy To Get Fix


Like any failed rehab junkie deprived of his drug, Timmy Geithner will exit rehab by going on a hard core binge.

Thanks small government dad Boehner for funding Timmy's next binge. Dad just can't stand to see Timmy suffer even though he knows it will destroy his family and financially ruin him. 

I just hope little Timmy's Chinese dealer doesn't get tired of his junkie whining and cut him off when he is most vulnerable. 


ThirdCoastSurfer's picture

How large is the debt?

We will raise the limit by an amount that will last us a little more than one year by an amount that wasn't reached in total until 1986. By an amount that the entire Federal budget didn't reach until 2003. If it was GDP and not debt, it would rank as the world's 7th largest -ahead of Brazil and just behind the United Kingdom!

chinawholesaler's picture

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