US Debt Ceiling Breached Today – Pensions Raided…
Well it’s official: the US credit card has officially been maxed out…
The United States is expected to reach the legal limit on its debt later on Monday and will start dipping into federal retirement funds to give the country more room to borrow, a Treasury official said.
As Reuters reports further, The U.S. Treasury will settle $72 billion in maturing bonds on Monday, which will push the country right up against its $14.294 trillion borrowing cap, the official said.
To all those who thought only the insolvent government of Ireland will plunder pension funds, our condolences.
Secretary Geithner sent a letter to Congress this morning alerting them to actions that have be taken to create additional headroom under the debt limit so that Treasury can continue funding obligations made by Congresses past and present.
The Secretary declared a “debt issuance suspension period” for the Civil Service Retirement and Disability Fund, permitting Treasury to redeem a portion of existing Treasury securities held by that fund as investments and suspend issuance of new Treasury securities to that fund as investments.
He also suspended the daily reinvestment of Treasury securities held as investments by the Government Securities Investment Fund of the Federal Employees’ Retirement System Thrift Savings Plan. Original source.
Combined with the fact that China’s Treasury holdings have continued to decline for the past five months in a row, and the US is quickly running out of options.
Washington has until August 2nd to boost the ceiling so the Treasury can continue to pay their bills and keep the doors open.
This is yet another confirmation of what we’ve been predicting since 2008…
The US has two options… Default and a deflationary depression…
Or turn up the printing presses for QE3,4,5 and beyond into hyper-inflationary oblivion.
So which will it be?
Well if you want to know what’s going to happen, forget everything else, and simply ask yourself… What do people do?
Because the pattern is the same throughout history…
- What do people in power do with that power? Do they willingly give it up, or do they abuse it?
- What do people in power do with opportunity? Do they let it pass, or take it?
- What do people in power do when they make mistakes? Do they do what’s right for the masses at their own expense, or do the protect themselves and their friends first?
- What do people in power do with responsibility? Do they accept it, or pass it on to someone else?
- What do people in power do? What’s right for others, or what’s right for them?
- So ask yourself… What will our politicians, lawmakers, bankers, and traders do?
Will they face the pain of their decisions and do what is right to fix the problem, likely losing everything they have and all of their power in the process, or will they do everything then can to try and keep their power, and above all else, protect the status quo?
If you understand human nature, then you can look back at history and know with confidence exactly what will happen again, and that it will be no different this time. While the pictures on our Dollar bills may have changed, our nature has not…
The ball will be kicked down the road yet again, and more money will be printed because it’s easier than austerity .
Unfortunately you can’t fix a problem caused by too much debt, by issuing record amounts of even more debt.
Gold will ultimately save the day for those who own it, as it has hundreds of times, over thousands of years.
In the mean time, all that matters to you is that this is a HUGE opportunity to PROTECT yourself and PROFIT by betting against Washington.
Just because the ship’s going down at the hands of idiots, doesn’t mean you have to go down with it.
Would love to hear your thoughts below…