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Old 10-16-2013, 03:33 PM   #118
KC native KC native is offline
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Quote:
Originally Posted by Amnorix View Post
That's not my understand (in terms of being able to make obligated payments). My understanding is that the treasury will have about $30 billion cash on hand at midnight tonight, plus whatever tax revenues come in, to pay its obligations.

My understanding is that by NO LATER than November 1, it will be unable to meet its payment obligations. November 1 is a magic date because it includes Social Security, military pay, veteran's benefits, and interest on government obligations. Those alone total over $67 billion.

If the feds fail to pay its sovereign debt obligations, of course, then all bets are off. Mutual funds are not permitted to hold defaulted securities, which would mean the largest, fire sale of US bonds (or any bonds) ever seen would happen. US bonds are also often used as collateral for short term inter-bank loans etc., and underpin world financial markets.

Then you have the fact that many foreign holders (including sovereign funds) that hold U.S. bonds and roll them over whenever they come due may well not roll them over, and what you have is a unimaginable catastrophe that would result.

I guess you're saying we could opt not to pay the military in order to pay interest on our debt, so we aren't in payment default, but ....seriously...?
This would be correct.
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