Treasury Bonds
The debt ceiling was reached during 08/2021.By mid October, the treasury will run out of cash.
Default on bonds increasingly likely unless "extraordinary measures" put into place.
These are the extraordinary measures from the CBO:
- Continue to suspend investments of the Thrift Savings Plan’s G Fund. Otherwise rolled over or reinvested daily, those investments totaled $20 billion in Treasury securities as of August 31, 2021.
- Suspend investments of the Exchange Stabilization Fund.3 Otherwise rolled over daily, such investments totaled $23 billion as of August 31, 2021.
- Suspend the issuance of new securities for the CSRDF and the PSRHBF, which total about $3 billion each month
- Redeem, in advance, securities held by the CSRDF and the PSRHBF in amounts equal in value to benefit payments that are due in the near future. CBO estimates that such payments amount to about $7 billion per month, and an annual payment of about $48 billion is scheduled for September 30, 2021.
- Exchange Federal Financing Bank securities, which do not count against the debt limit, for Treasury securities held by the CSRDF.4 Approximately $9 billion in securities was available to be exchanged as of August 31, 2021
If they choose none of these measures, they will default on the bonds.
In the last hour, they have agreed to increase the debt ceiling through to early December.
The run up to Christmas is when this will play down again. There is a risk of government shutdown which would leave many federal employees unemployed.
The problem is still here and tbh I think the treasury is in serious trouble.
Thoughts? |
