US Adds $120 Billion In Debt Since Debt Ceiling Hike On Friday, $310 Billion More On Deck In Next Two Months
Remember when the US hiked its debt ceiling on Friday courtesy of a formulaic 52 affirmative votes in the Senate, giving the Treasury $1.2 trillion in dry debt powder to attempt to grow the economy one more time according to the algorithmic fantasies of voodoo priests with pieces of Ivy League parchment on their walls? Well, two days later, the dry powder is less than $1.1 trillion. In other words, in the past two days, total US debt increased by $120 billion, along the lines of our expectations, as the Treasury filled up all the G-fund cash it had pillaged to continue issuing debt throughout the month of January even though it was formally above the debt ceiling. What is more concerning, is that as the chart below shows, the trendline of US debt since the beginning of 2011 is no longer a straight line, but has slowly transformed into a parabola, the very same word used as the root in such other infamous words as, for example, parabolic.
It gets worse: even according to the drastically, and very unrealistically, downward revised borrowing expectations of the Treasury released yesterday, the US will issue $444 billion in debt in this quarter. Today's number means that in February and March alone Tim Geithner will raise another $310 billion, which will send total debt to $15.7 trillion as of March 31. What is the final debt ceiling? Just under $16.4 trillion. So the US will have $700 billion in debt issuance capacity for the 7 months leading into the presidential election (and 9 until the end of the year).
Now naturally, if the debt ceiling becomes a sticking point at the election, Obama's chances of reelection plunge. Which makes us wonder - will Republicans grasp that the paradox of defeating Obama is precisely in giving him a carte blanche on all the stimulus programs he wants? Because if Congress approves another $200, 300 or even $400 billion in stimulus pork (the only thing better than one Solyndra? One thousand Solyndras!) the Treasury will drown in the need to raise hundreds of billions more, and will in fact hit the ceiling well in advance of the elections. As for the stimulus projects themselves, they will crash and burn just like all centrally planned endeavors, and actually results in a far worse outcome than if they had never been attempted. Because ironically, now that the entire world has passed the Rubicon, and unfortunately there really is no way of fixing anything, the only thing one can hope for is letting the status quo get on with doing what it does best, and leading the 100 year process of central planning to its sad and terminal conclusion, only after which can the "fresh start" reset occur. Ironically, the same thing is true with the farce that is the debt ceiling: the best way to finally get back to a fiscally prudent regime? Why go to town, of course.
And, we almost forgot to add, as of today, total debt to GDP is once again well over 100% even with the latest Q4 GDP data, at 100.4% and rising every day.
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We should probably spent a bunch of money on moon bases and toy soldiers to get us out of this.
-Paul Krugman, PhD. Nobel Laureate.
Sometimes you just have to suspend all reason and simply BELIEVE in the audacity of HOPE.
http://www.youtube.com/watch?v=Akoukq5DvAE
Bullish...
looks like gold ...
If the missing MF Global money could just be 'found' and used for the debt that would be cool.
Sadly, the MF Global money is only 1% of the latest increase. And people thought that was theft...
chump change
incredibly bullish...
It has been observed that each time the debt ceiling is raised an upturn in the gold curve does occur....not just your imagination.
Love these long cascades
wheeeeee
The $2.4 trillion last August was Obama's re-election money. I thought everyone understood that?
And he will spend the money in QII and QIII to give the appearance of prosperity. QIV means nothing to Obama.
I mean really is this not politics 101?
Clinton was the master.
2.4 trillion went to obama . . . ?
still talking dummies: I thought everyone understood that...politics 101, askin'em for'n answer, is this not 1<= 0 =>1 ?
just askin for it:
http://www.youtube.com/watch?v=DwDbd4jQpkA
The debt ceiling was increased $2.4 trillion last August.
again: george w. bush and barack obama -- the two worst back to back rulers ever. clinton, while a slimy criminal, had better fiscal policy and actually won, sort of, his one smallish war (serbia).
it's not true that all centrally planned endeavors are pointless or destructive: much government run research, education and infrastructure projects are quite useful. stopped cholera, etc. government, increasingly in the last decade particularly, has become so incompetent and corrupt that such a belief is dying. since government collects so much money (and can print more) it must be held to higher standards. jail the worst. ron paul '12.
My money is on recession this year. If true, another term for Obama is unlikely. This market is getting increasingly attractive for a big move into SPXU. I've been dollar cost averaging purchases on the recent sharp upward spikes, but there comes a day when it's time to hit it hard with the big short. Last time around credit spreads led the way (you didn't have to top time with technicals, just look for divergence in credit spreads versus equities).
This is getting to be quite the party for equities. Let's keep it rolling folks. I love a good melt up.
Forget intrade.
If you want to know who will win the POTUS election, just add up the money contributed to each candidate by Goldman & JPM.
Whoever collects the most from those two lieutenants of the House of the Red Shield wins - guaranteed.
'found'...Even, if it was your money?..."be cool"?
Pedantic. To see a truly parabolic chart in the financial world would be nothing less than incredible.
a typical parabola: http://tiny.cc/j84zs
pocket change for uncle sam...
pocket change for uncle sam...
except it's coming out of uncle ching's pocket, nice effort with the nonchalance though
Well, you've just seen one. "Pedantic." I don't think that word means what you think it means.
P.S. We don't make it to the upward slope, just a warning.
http://www.youtube.com/watch?v=OHVjs4aobqs
I'm sorry but I thought it was obvious what I was saying. I'll rephrase it for you; "I'm being pedantic but".
Pedantic . . . ? . . . neither the expected stark economy of words, on a finacial blog, nor even hyperbole itself quite account for the profligacy nor incisive sorcery of such an opening sentence, thusly:
Remember when the US hiked its debt ceiling on Friday courtesy of a formulaic 52 affirmative votes in the Senate giving the Treasury $1.2 trillion in dry debt powder to attempt to grow the economy one more time according to the algorithmic fantasies of voodoo priests with pieces of Ivy League parchment on their walls?
smiler03
get in on the fun, lighten up and enjoy the sarcasm
I prefer step functions myself however parabolas are very pretty.
smiler: i get a "bad gateway" message.
The debt is truly parabolic. It is quite sad.
http://ericsprott.blogspot.com/
It's not parabolic, it's exponential. I know what you're saying, and I understand that everyone says "parabolic" and that people don't mean it literally. But the fact is that it is exponential, and the ramifications of that fact are serious.
And while we're at it, everyone should note that exponential functions ultimately grow faster than parabolic functions. Much faster. Much, much faster.
In the immortal words of Buzz Lightyear, "To infinity ... and beyond!"
+ another 1
Correct, exponential is worse. I just wrote about exponential growth at my blog.
"Naturally, if the debt ceiling becomes a sticking point at the election, Obama's chances of reelection plunge. Which makes us wonder - will Republicans grasp that the paradox of defeating Obama is precisely in giving him a carte blanche on all the stimulus programs he wants?"
Good to know they put our interests before their political own
You still believe that left/right, red/blue party crap ... at this point in the game?
Newt or Mitt has NO plan for cutting ANY spending and Obama has obviously demonstrated his desire for govt spending, so I have to agree that R or D - we all will be fucked with a red, white, and blue dilrod.
FIFY. The election in November is already meaningless, if we even get that far. Consider the current lull the calm before the storm.
some call it sarcasm
What was the name of that strategy, to bring about marxism, i f I remember correctly, that involved letting capitalism run unchecked to get to the end state of socialism as quickly as possible? I have been trying to think of this for months. I think Obama was accused of being a disciple of it and it is just named after the last names of the people that used it/came up with it.
I feel like we are there with debt. If we dont get a Ron Paul to reign it in, it will be reigned in by racking up ever more amounts of it eventually. The difference to me is who gets a chair when the music stops, and also what kind of political regime we have after.
More like it's Odd A City (washington) could spend so much!
cnbc said that this parabolic spending was just temporary until the economy is back on firmer ground. The us treasury debt is still the safest asset. (;
And I will feel just that much more secure when I have to send them a check each month to keep my assets safe.
The parabolic spending is temporary. It is the exponential spending that will catch everyone by surprise.
cnbc said that this parabolic spending was just temporary until . . . it lands
nasa now having been charged with its arc
. . . as well as reentry
astronomical
*deleted* out of sequence
Hopefully Krugman has all his money in USTs.
things sure seem to be picking up maximum speed.......
You're correct, except you imply there's a maximum. There isn't and things are worse than meets the eye.
A classic sign of exponential growth is a doubling over some roughly constant period, aka N = X^(2t/T) where T is the time interval to double and t is the time we're at. For most processes, if you look at the exponent itself, it usually doesn't change (much) as the interval is roughly constnat, but the magnitude of the results doubles over the same roughly constant interval. And that repeated doubling over time turns into the insane, out-of-control numbers we're used to from exponential progressions. So, it'd be a fucking disaster if it were even this. But...
Tyler's graph has an offset Y axis and truncated X axis. Usually when this trick i used it's to make something look more exponential than it really is. In this case, it makes it look less exponential. Look at a 10-year or 50-year chart in constant dollars and it's pretty concerning. I eyeballed the long-term chart and it looks like we're doubling the debt every five years right now.
Now, that's bad, but what's terrifying is that a decade ago, the doubling interval was 15 years. In other words, not only are we dealing with an exponentially growing debt, we're dealing with an exponentially growing where the exponent that determines growth is changing, and as a result, the doubling time is decreasing.
If a system were simply accelerating it's speed -- it'd have a constant exponent describing it's speed equation. In the case of the US debt, the acceleration of the debt itself is accelerating, and the time interval to doubling in shortening. I don't think there's enough data to determine if the rate of interval shortening is linear or exponential, but if it's a linear case, we hit essentially infinite growth (aka dollar collapse to zero) in approximately 6 years. The scary little uptick at the very end of the chart could indicate exponentially growing acceleration. That means it happens sooner.
Nothing real can go to infinity, the charts are telling us something will change (and likely break down significantly) in five years at most. If the debt growth acceleration is itself exponential, the doubling interval will likely to be measured in months within a year. The fact that real markets aren't heading up on afterburners just shows that everyone is clueless and/or active intervention is keeping it from happening... but for how long?
+ 1 I wish I could give this + 1 quintillion.
seek is one of Zero Hedge's many treasures, I have found seek's remarks on gold and other matters to be spot-on.
I did not know that the exponent was increasing. Exponential growth on steroids. The end will not be pretty, I agree that something will break down, perhaps catastrophically, within a few years at most.
Nice post, seek.
Here's a formula that some may find instructive as to how the laws of physics can demonstrate how such things pan out:
v(f) = v(o) + at
[Final velocity is equal to initial velocity plus the acceleration times time]
N = X^(2t/T) = WW3
nice
I thought E=MC² described it, guess I keep seeing fiat mushroom clouds.
We're talking about Bernankenomics here.
We've stepped it up a few notches.
next stop: goat rodeo.
http://www.hussmanfunds.com/wmc/wmc120130.htm
It basically is over. I'm having the gold talk with everyone I know. It consists of: Buy gold and silver. If you don't and are broke in 10 years, I told you so. Don't come crying to me.
10 years is pretty optimistic, but then again Bernanke Wallpapering has made the house stay up longer than I would have believed possible.
Exponential Bitchez!!!
to the trillionith power
Kanye West - Stronger
http://www.youtube.com/watch?v=PsO6ZnUZI0g&ob=av3e (4:27)
+1
Get it right, man.
http://www.youtube.com/watch?v=K2cYWfq--Nw
rap remixes are garbage
Correct, and it's not just mincing words. The difference is profound.
That chart soars like a rocket trail...no BTFD there
Value of one gold mark in paper marks
ZWDvUSDchart
<-- Do 100 trillion USD debt ceiling raise now. This should tide us over for 2 years (hopefully)
<-- Raise the debt ceiling each month, after a dramatic, for-show only, meaningless debate
--Sen. Barack Obama, D-Ill.
Senate Floor Speech
2006
100 trillion USD. That's like 200 loaves of bread in 1923 Reichmarks.
Think big man, think BIG....
That's like 2 loaves. 5 fish. fishes. loafs. 5 loafs. 2 fishes . . .
whatever, loafs,oafs&wishes, Think biblical man, think BIBLICAL . . . . .
where even ellipses be thee fruitful. and multiply
or 1/2 cup of coffee in 2008 zimbabwe bucks.
I can get a McDonald's or Dunkin' Donuts coffee, both far superior to Starbucks burnt roast, for around a BernankBuck.
As long as that remains the case, it's all good.
/s
That's 6 year old bullshit....math and logic now suspended until Nov.7...Weimar here we come.
come indicates future tense, are indicates present tense.
were indicates past tense.
both are and were are hilarious in that sentence.
absolutely hilarious.
pardon me, while I pull my fingernails out for my further amusement.
You nailed that one! 1933 Germany had extreme left and right wings, high unemployment 4 years after a depression, they introduced a bill that allowed them to stray from their Constitution and they crushed any opposition. Does any of this sound familar?
Familiar? Nope. This country's nationalism is strong, we have avoided the depression, and government follows the charter of our Republic to the letter. Now excuse me while I take the DUHllors I saved from my underwater NINJA loan refi through BofA, buy...excuse me finance a Chevy Volt over six and a half years, eat my bailout burger from McDonalds, and buy some US savings bonds for my children.
I voted for the second option.
"Debate", that's like a "Summit", right? I like those.
Why should Europe have all the fun?
Yeah, they should form something between the House and Senate.
They could call it, oh, I don't know, maybe, Super-Committee?
That would be AWE-SOME!
Growth of debt ceiling limit from 1940 through present (h/t Barry Ritholtz):
http://www.ritholtz.com/blog/wp-content/uploads/2011/05/Debt-ceiling-cha...
Look at the trajectory in the post-1971 period, which was, just coincidentally I'm sure, nothing short of a rocket trip after we went off the gold standard or any other 'built in' measure that restrained the amount of fiatski that could be replicated.
We're spending $1.43 for evey dollar of revenue coming into Treasury, so at least we've got that going for us now, and the future looks bright.
/s
Bullish...
The futures so bright I gotta wear shades!
http://youtu.be/8qrriKcwvlY Music always helps me feel better when comtemplating this unfathamonable numbers racket!
St. Carlin said the best thing about religion is the music..maybe goes for economic reporting too. In this excerpt Goldenberg the rich jew is played by Kudlow (cellos) and Schmuyle the other jew by cramer (muted trumpet)....
http://www.youtube.com/watch?v=kUsnOUI39ns
Wicked chart.
Hockey sticks are cool
And everyone thought Al Gore invented the hockey stick graph....
Whoopsie...lol.
"The academic at the centre of the ‘Climategate’ affair, whose raw data is crucial to the theory of climate change, has admitted that he has trouble ‘keeping track’ of the information.
Colleagues say that the reason Professor Phil Jones has refused Freedom of Information requests is that he may have actually lost the relevant papers."
Gosh, golly. who'da thunk it.
http://www.dailymail.co.uk/news/article-1250872/Climategate-U-turn-Astonishment-scientist-centre-global-warming-email-row-admits-data-organised.html
The continued, and accelerating, melting and retreat of both polar and alpine glaciers worldwide would tend to refute that claim.
No.
Its because they dont make ice the way they used to.
Really, links.. How many glaciers have been studied to verify this?
http://www.guardian.co.uk/environment/2010/jan/20/himalayan-glaciers-melt-claims-false-ipcc
How about the Guardian, more to everyones liking? IPCC lied, no say it ain't so..
And under those glaciers they find Viking settlements or smth like that. And some mountain passes used by the Romans become practicable.
Whodathunkit? You and the 3/100 scientists who simply can't (sarc) be wrong on climate change.
The Daily Mail? Good grief, you lot certainly don't mind slumming it with the worst of the MSM when the tale fits your loopy agenda.
http://blog.ucsusa.org/dismal-science-at-the-wall-street-journal?utm_source=sp&utm_medium=head&utm_campaign=sp-head-wsj-01-30-12
I'll add this to the growing list of your treasured delusions that are enabled by denial.
"The stars at night, are big and bright!" <clap!clap!clap!clap!>
Hey... Are you denying Al Gore is a genius?! That man sacrificed for us, to save us from global warmering. I have it on good information that he savi.g energy at his compound as we speak. Al is a science man, unlike you crazy deniers!
Everything is ok.. go file your tax confession and spend this instant. Be a Paytriot! damn you!
Loopy agenda?
Your boy Al Gore has been moonlighting as the local weatherman & "climatologist" for over twenty years now and has consistently, spectacularly wrong.
The only nutcases who still believe that CO2 causes "climate change" are the ones who sit around clapping while chanting "the stars are big and bright" without contemplatiing that something so bright can also be very hot.
That would be you GoinFawr ROTFL!!!
You see its like this, my trollish space traveler.
Scientists don't fight peer review of their findings & theories, they invite it.
They don't manipulate their data to arrive at a preconcieved outcome. And they certainly don't lose the very data they stake their theories & livlihoods upon. When they find their predictive models don't work (even when looking back at known knowns) they don't ask for more funding for a different model or re-enter false data to get the desired outcome, some actually revisit their original hypothesis.
Agenda you say?
Bravo. Well said my friend.
Be quiet.. Al is a great man! A GREAT MAN!!!!!!