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View Full Version : U.S. borrowing already above the debt limit... except technically not



Little-Acorn
04-21-2011, 11:20 AM
A very small part of the National Debt is "not subject to the limit", which barely puts it back under the Debt Ceiling... for a few days.

But when the Obamanites do start borrowing over the limit, it should hardly be news. A judge found all of Obamacare unconstitutional, in an opinion that ordered them to stop implementing it... but they simply disobeyed the law and kept right on going with it. And Congress has passed a number of Continuing Resolutions that ordered them to not spend more than they did in previous periods... yet they have simply increased spending by huge amounts anyway.

Why should the Obamanites disobeying the law on the Debt ceiling, be any different?

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http://www.zerohedge.com/article/total-us-debt-now-officially-above-ceiling

A quick look at today’s just released total debt to the penny from the Treasury may crimp the artificial smile of even such die hard administration sycophants as Moodys. Why: because the total debt, as we predicted when we observed last week’s 30 Year auction, is now at $14,305,336,580,992.11. This is a problem because as anyone who rails against the broken US fiscal apparatus should be able to tell you, the debt ceiling is $14.294 trillion. In other words we have now officially breached the debt ceiling by $11 billion. So why has the US not filed a notice of default yet? Because the actual debt that matters for legal purposes is the debt “subject to the limit”, which is $52 billion less than the total debt primarily due to $10 billion held at the Federal Financing Bank, and $41 billion in unamortized discount: a number which fluctuates in time depending on how much over or under par bonds are issued, but which ultimately will be zero at maturity of all debt (haha). In other words, as of today, the US Treasury has dry powder for just another $41 billion in issuance, or just over your average 5 Year auction. This can be seen best on the following chart from the Treasury where the total debt line has just passed the limit.

So what does this mean for near term issuance? Also per the Treasury, there is a total of $55 billion in debt paydown in the next week primarily in bill redemptions, offset by $14 billion in issuance in the last week of April. The problem is that this week also happens to be a major tax refund week. We anticipate that tax refunds will likely total between $20 -25 billion net over tax revenues. Which means there will be a net cash need of about $75 billion. As we ended Thursday at about $30 billion, Friday’s cash balance (released at 4pm by the FMS) could be very critical to determine if the Treasury will be forced to come up with some emergency form of 11th hour cash raise. It also means that the debt ceiling clock is ticking ever louder. The Treasury will have capacity for one more full weekly auction, to be completed in the first week of May, and then it is game over.

Update: cash as of Friday was $58 billion. With $55 billion in cash out this week and who knows how much of refund funding, it could get mightly close…

ahhhhhhhhh.......the moment we have been planning for, for a very, very long while.

Missileman
04-21-2011, 05:42 PM
A very small part of the National Debt is "not subject to the limit", which barely puts it back under the Debt Ceiling... for a few days.

But when the Obamanites do start borrowing over the limit, it should hardly be news. A judge found all of Obamacare unconstitutional, in an opinion that ordered them to stop implementing it... but they simply disobeyed the law and kept right on going with it. And Congress has passed a number of Continuing Resolutions that ordered them to not spend more than they did in previous periods... yet they have simply increased spending by huge amounts anyway.

Why should the Obamanites disobeying the law on the Debt ceiling, be any different?

----------------------------------

http://www.zerohedge.com/article/total-us-debt-now-officially-above-ceiling

A quick look at today’s just released total debt to the penny from the Treasury may crimp the artificial smile of even such die hard administration sycophants as Moodys. Why: because the total debt, as we predicted when we observed last week’s 30 Year auction, is now at $14,305,336,580,992.11. This is a problem because as anyone who rails against the broken US fiscal apparatus should be able to tell you, the debt ceiling is $14.294 trillion. In other words we have now officially breached the debt ceiling by $11 billion. So why has the US not filed a notice of default yet? Because the actual debt that matters for legal purposes is the debt “subject to the limit”, which is $52 billion less than the total debt primarily due to $10 billion held at the Federal Financing Bank, and $41 billion in unamortized discount: a number which fluctuates in time depending on how much over or under par bonds are issued, but which ultimately will be zero at maturity of all debt (haha). In other words, as of today, the US Treasury has dry powder for just another $41 billion in issuance, or just over your average 5 Year auction. This can be seen best on the following chart from the Treasury where the total debt line has just passed the limit.

So what does this mean for near term issuance? Also per the Treasury, there is a total of $55 billion in debt paydown in the next week primarily in bill redemptions, offset by $14 billion in issuance in the last week of April. The problem is that this week also happens to be a major tax refund week. We anticipate that tax refunds will likely total between $20 -25 billion net over tax revenues. Which means there will be a net cash need of about $75 billion. As we ended Thursday at about $30 billion, Friday’s cash balance (released at 4pm by the FMS) could be very critical to determine if the Treasury will be forced to come up with some emergency form of 11th hour cash raise. It also means that the debt ceiling clock is ticking ever louder. The Treasury will have capacity for one more full weekly auction, to be completed in the first week of May, and then it is game over.

Update: cash as of Friday was $58 billion. With $55 billion in cash out this week and who knows how much of refund funding, it could get mightly close…

ahhhhhhhhh.......the moment we have been planning for, for a very, very long while.

I don't understand how making more bills to pay other bills is in any way a sane approach.

Nukeman
04-22-2011, 05:46 AM
I don't understand how making more bills to pay other bills is in any way a sane approach.

HEY............... Listen smart guy!!!!!!! Bernake has this all in hand and he is soooooo mcuh smarter than any of us so just deal with it!!!!!!!!


sarcasm off