The Treasury's Adjustable Rate Deficit is About to Go Boom
It's called the debt ceiling and don't you think if we keep hitting it we might want to get our spending under control instead of continuously running to those idiots in Congress for a raise?
Oh please, Timmy never learns.
From the Treasury's FEBRUARY 2010 QUARTERLY REFUNDING STATEMENT:
Based on current projections, Treasury expects to reach the debt ceiling as early as the end of February. However, the government’s cash flows are volatile, making it difficult to forecast a precise date.
Treasury is working closely with Congress to pass legislation to increase the debt ceiling. We will keep financial market participants apprised of developments as the debt outstanding approaches the statutory limit.
Where I come from, we call that living paycheck to paycheck. Oh dear, we're doomed.
Altheo News has the clearest explanation for what I've seen go down this past year that I've ever read, could it be any simpler?
It is unclear how the 2009 budget deficit was financed. A likely source was the bank reserves created for financial institutions by the Federal Reserve when it purchased their toxic financial instruments. These reserves were then used to purchase the new Treasury debt. In other words, the budget deficit was financed by deterioration in the balance sheet of the Federal Reserve. How long can such an exchange of assets continue before the Federal Reserve has to finance the government’s deficit by creating new money?
Excellent question, AN, I guess we will find out, won't we?
Here comes the adjustable rate!