31 July 2011

US deficit and debt ceiling

An interesting chart showing payments to be made by the US Government after Tuesday 2 August deadline when the debt ceiling will be reached and the US no longer able to borrow: on July 28th the US debt stood at USD 14,293.275 billion extremely close to the statutory limit of USD 14,294 billion.
The Bipartisan Policy Center calculated that August 10 is the date when the US will run out of cash and not August 2. Anyway the day of reckoning is getting really close…
It is worth noting that the debt ceiling has been increased 78 times since 1960, or 47 times the USD 300 billion record reached during WWII.
If a bipartisan deal is reached by then, expect the USD to rally and precious metals to fall.