America will hit debt ceiling in October

Discussion in 'Currencies' started by Naphthalene Man, Sep 5, 2013.

  1. Naphthalene Man

    Naphthalene Man Active Member Silver Stacker

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    Apologies if this has been posted elsewhere but my limited searching hasn't uncovered it...
    Thought it may be of interest. A few days ago AdelaideNow stated that
    America will hit debt ceiling in October, the US Treasury says

    http://www.adelaidenow.com.au/busin...us-treasury-says/story-fni0d2cp-1226704687286

    THE US will hit its statutory debt ceiling in mid-October, making it hard for the government to meet its obligations, US Treasury Secretary Jacob Lew says.
    In a letter to Congress, Lew urged legislators to raise the limit from the current $US16.7 trillion ($A18.5 trillion), saying to not do so "would cause irreparable harm to the American economy".

    The Treasury has been operating under the ceiling since it reached that level on May 17, helped by "extraordinary measures" to manage expenditures and a surge in receipts above forecasts.

    However, Lew said, "Based on our latest estimates, extraordinary measures are projected to be exhausted in the middle of October".

    "At that point, the United States will have reached the limit of its borrowing authority, and Treasury would be left to fund the government with only the cash we have on hand on any given day," he said.

    That "would place the United States in an unacceptable position," Lew said, unable to serve rising commitments to issue payments for health and retirement needs and not able to pay the required salaries.

    Moreover, he warned, if investor demand for US government debt declines, the country could face an immediate cash shortfall.

    "Indeed, such a scenario could undermine financial markets and result in significant disruptions to our economy."
     
  2. willrocks

    willrocks Well-Known Member Silver Stacker

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    Obviously they'll raise it again. What else can they do?
     
  3. Jim...

    Jim... New Member

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    I agree they'll raise it again and then again and then again and so on. The only alternative is to balance the books (highly unlikely considering the fallout ).
     
  4. trew

    trew Active Member Silver Stacker

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    It's like a gambler in a casino with a self imposed gambling limit

    Can always be broken - until the money actually runs out or the casino won't extend any more credit
     
  5. thatguy

    thatguy Active Member

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    better question is who will buy the debt... fed is posturing it won't. So who is going to buy 45billion per month (or nearly half of the current deficit spending/month)?
     

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