Burning The Candle At Both Ends: Raising the Debt Ceiling, and Extending QE-2 Indefinitely

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Johnny Oxygen
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Burning The Candle At Both Ends: Raising the Debt Ceiling, and Extending QE-2 Indefinitely

http://gonzalolira.blogspot.com/2011/04/burning-candle-at-both-ends-raising.html#more

 

The Federal government will become bankrupt.

If the debt ceiling is not raised, then the Federal government will not be able to issue debt and get the cash to pay for its obligations—including Social Security, the military, Federal employee salaries, etc. Most important of all, if the debt ceiling is not raised, then the Treasury won’t be able to raise the cash to pay the interests on Treasury bonds—which means that the United States will, for the first time in 220 years, default on its sovereign debt.

And if QE-2 is not extended, then the Federal government will not be able to find buyers for its debt issuance—and therefore won’t be able to get the cash to pay for its abovementioned obligations, including paying the interest on the Treasury bonds.

In other words, we are about to hit the wall. And the clowns running the circus are going to do everything in their power to avoid that splatter.

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