Skip to comments.U.S. Treasury, Fed planning for possible default -source
Posted on 10/09/2013 4:05:44 PM PDT by mdittmar
* Contingencies eyed if Congress fails to raise debt limit
* Treasury, Fed officials focused on default options
* Top Republican says Congress should see plans
* Officials stress failure to raise debt limit disastrous
By Tim Reid and Jonathan Spicer
WASHINGTON/NEW YORK, Oct 9 (Reuters) - U.S. Treasury and Federal Reserve officials worried about the growing possibility of a catastrophic default are crafting contingency plans to mitigate the economic fallout if Congress fails to extend America's borrowing authority, a source familiar with the plans said.
With just eight days before the Treasury Department says the U.S. will hit its $16.7 trillion borrowing limit, lawmakers and the White House remain far from a deal to extend it. Officials are examining what options might be available to calm financial markets if a U.S. debt payment is missed.
(Excerpt) Read more at reuters.com ...
All this does is expose all the sticky fingers, parasites, frauds, and dead wood that we are all paying for. FReepers knew it was bad but this is gluttony. They don’t need anymore money, credit, or time. Every taxpaying American should get a windfall profit check from the gov’t. CommieCare is DOA.
Default can’t happen here. Conservative financial experts have showed us the magic money tree! It doesn’t need no stinking production or exports!
[”Conservative.” Heh. That’s funny. In the politics and business of 2013, there are no conservatives.]
S&P is more conservative (honest) than Moody’s, BTW.
Texas Monthly hosted a Q&A with Dallas Fed Chair Richard Fisher at SMU on Monday. I attended. One of the questions he was asked was how can we default if we take in 200BN/month and debt servicing is in the range of 20BN/month.
This is a paraphrase of his answer: maybe we can pay the debt servicing and maybe not, but it doesn’t matter; the result will be the same - an unthinkable black swan disaster.
October is one of the lowest receipt months for the government and at the same time, about 1/3rd of annual expenses are funded during that month. There’s no guarantee that there actually would be money there to pay.
EVEN if there were cash on hand to pay for debt servicing, there is certainly not the money to pay debt servicing, SS, Medicare and the Military, not to mention everything after that. No matter how you prioritize and no matter whether you agree with it or not, great swaths of the economy are propped by the government and the inability to raise the debt limit will cause a serious of cascade failures that will rattle the markets, create worldwide stress fractures, and send interest rates through the roof.
It would be an unthinkable black swan disaster. His words.
Whether we fail to pay the debt directly in October, or have to refinance future debt in a post-black swan interest rate environment, the result is the same: both paths lead to default.
Don’t shoot the messenger.
Do you understand how much 1 trillion is?
we need to borrow more money from a privately owned "bank" that creates money that does not exist out of thin air so that we can pay the privately owned bank interest on the imaginary debt on the imaginary money it just pulled out of its imaginary arse.
but we as individual citizens need to give them 50% of everything we earn to borrow this imaginary money so they can spend it on frivolous political extortion exercises to shift power
I get it
You earned your money. Your labor is real. Fiat currency has always been fiat currency. We abolished slavery a while back. The Democrat Plantation needs more slaves.
1. The debt has to be bigger than they admit to.
2. Revenues are less than they admit to.
There are people in jail for violating accounting rules. Math doesn't lie.
Thanks for the numbers.
More scare tactics from our own government. Do they not care about how the markets may react to their propaganda?
I think we will default because it is Obama’s objective.
the Proverb in the Bible "the borrower is slave to the lender" is a universal truth, we are being sold into slavery to the rest of the world by politicians .
Perhaps this was the reason the founders installed the second amendment, we are supposed to rise up and turn this back around, like Jesus turning over the moneychangers tables at the temple
The markets are the gov’t and the Fed. One big rigged casino. Sucking pension funds, 401K funds, and all sorts of private equity dry. They are drinking your milkshake to coin a phrase.
This just in:
Video: Harry Reid Offers Talking Points To John Boehner On Increasing debt ceiling ...
you are the first one i’ve heard
mention that in relation to how
things stand and where they
it was one of my initial thoughts-—
It looks like the day is almost here where people start opening their eyes and see who the problem is. Pray the Pubs don't shoot themselves in the foot.
“I heard Husseins press conference today and now he is saying seniors risk not getting their social security checks.”
Yeah, His Petulance is real worried about having to work on a balanced budget, isn’t he? Remember: the more they squeal, the closer we are to winning.
Well honoring the debt and interest payments first would be the intelligent thing to do for any one who wanted to obey the constitution and do as little harm to the USA as possible.
Is there anyone here who thinks that the current POTUS cares about the constitution or protecting the USA economically?
obama has the republicans over a barrel like Reggie Love. If they raise the debt limit our credit rating will be lowered and the collapse will be postponed. If obama defaults we’ll crash sooner. Either way, he gets what he wants.
Well I hope it is not that hopeless - that would imply that the Republicans who started this fight were only doing it for show to begin with. I hope they have more options at their disposal than what you have suggested. Otherwise, I don’t see any way at all really that they don’t fold before Oct 17.
The only reason a default happens is because dear leader CHOOSES to default.>>>>>>>>>>>>>>>>>>
Dear leader wants to destroy the United States of America.
According to him, the nation’s wealth was achieved on the backs of exploited and enslaved minorities. Dear leader considers himself historical justice on the hoof. This is the ideology of Rev. Wright. This is the method of Saul Alinsky and his theory on creating revolution to snatch
freedom away from the People.
Boehner is quite right to make a stand. And because he did so, we see the ugly tyranny of the Obama administration and its hell for leather ride towards a totalitarian state.
Obama must be impeached or removed. We have a budding , twisted scion of people like Adolf, Benito and Nicholas ( Ceaucescu) esconced in the White House.Now Obama is making his move to totally subjugate a free nation by usurping the financial role of Congress.
We are on the verge of becoming the United States of Zimbabwe, with a far worse, much more desperate dictator than Mugabe at the helm.
This is a good read here about the fall of our nation:
“So do you think a debt default is something that could actually happen and literally single-handedly cause a new Great Depression?”
Uh, in the real world the new “Great Depression” is here and it is looking far worse than the thirties. It is just being masked as much as possible by manipulation and gyration and media coverup. One old man who remembers the thirties told me this is NOT a depression because we don’t have soup kitchens! My response to that is wake up, we have nearly fifty million on EBT “food stamp” benefits. It is now possible for people who have no clue how to make it on their own to walk around with the appearance of being self-sufficient, even middle-class people. This was not possible in the thirties.