(Reuters) - The United States will hit the legal limit on its ability to borrow no later than May 16, Treasury Secretary Timothy Geithner said on Monday, ramping up pressure on Congress to act to avoid a debt default.
"The longer Congress fails to act, the more we risk that investors here and around the world will lose confidence in our ability to meet our commitments and our obligations," Geithner said in a letter to congressional leaders.
"Default by the United States is unthinkable."
Previously, the Treasury had forecast that the $14.3 trillion statutory debt limit would be reached between April 15 and May 31. As of Friday, Treasury borrowing stood just $95 billion from the ceiling.
Some Republican lawmakers have sought to use the need to raise the debt limit as a lever to pressure the Obama administration into agreeing on large-scale budget cuts.
The debt-limit showdown comes as Congress struggles to complete a spending package that would keep the government operating beyond Friday.
Republicans are seeking to use that bill to enact deep spending cuts and lawmakers are focusing on a proposal to trim this year's budget by $33 billion, a relatively small amount compared with a projected $1.4 trillion deficit.
Geithner said a failure to raise the debt ceiling in a timely way would push interest rates higher and spark "a financial crisis potentially more severe than the crisis from which we are only starting to recover."
Both Geithner and Federal Reserve Chairman Ben Bernanke have said a failure to raise the ceiling could have "catastrophic consequences."
BUYING TIME
As the government nears the debt ceiling, the Treasury has authority to take certain extraordinary measures to postpone the date the United States would default on its obligations.
However, those actions would be exhausted after about eight weeks and there would be "no headroom" to borrow after July 8, Geithner said.
Some lawmakers have called for legislation to force the Treasury to first pay interest on U.S. bonds before other obligations, such as unemployment benefits and Social Security and Medicare payments, as a way to stave off a debt default.
They have also asked Treasury whether financial assets such as the country's gold reserves or the government's portfolio of student loans could be sold to avoid raising the debt ceiling.
Treasury has rejected the proposals as unworkable.
Tuesday, April 5, 2011
Soros advises Obama to use forceful measures to override the will of the people
By Ed Lasky for American Thinker
George Soros funds the Center for American Progress, which has been characterized as Barack Obama’s Ideas Factory. John Podesta, its head, led the transition team when Barack Obama became President. The Center has also become a hiring hall for the Obama team, filling its positions with former employees (among these was controversial Van Jones — who now is back at the Center).
Apparently, George Soros and his Center are upset that the American people placed a roadblock in their plans when we rose up and painted the nation red. The Center now is providing a blueprint of ways Barack Obama can do an end run around the people’s will by resorting to methods that will strike many of us as being improper-to say the least. Relying on executive orders, interpretation of regulations, rule -making and the like they are collectively a recipe for even more power being assumed by President Obama.
From Tuesday’s Politico Playbook:
[The] Center for American Progress today is releasing a report, “Power of the President,” proposing 30 executive actions the president can take to advance progressive change in the areas of energy, the economy, health care, education, foreign policy, and national security. “The following authorities can be used to ensure progress on key issues facing the country today: Executive orders, Rulemaking, Agency management, Convening and creating public-private partnerships , Commanding the armed forces, Diplomacy.
The New York Times fleshes out these proposals with some suggestions about policy changes across the board. The ideology of George Soros shines through the Center’s report as it justifies this forceful approach to circumvent Congress when it states that:
[The] legislative battles that Mr. Obama waged during his first two years – notably on health care and financial regulatory reform – have created a weariness among the general public with the process of making laws. And it hints it has not helped Mr. Obama politically in the process.
In other words, when Congress passed a variety of laws Americans became dismayed by the horse-trading and bribes that were resorted to by Democrats to impose these policies on us. Instead of compromise and listening to the American people, Soros counsels that more forceful measures should be used to override the will of the American people.
And this is the man the Democratic Party has as their sugar daddy and who various Democratic leaders over the years have defended and praised (for example, as shown by this letter from 11 Democratic lawmakers).
He is certainly a dictatorial daddy.
George Soros funds the Center for American Progress, which has been characterized as Barack Obama’s Ideas Factory. John Podesta, its head, led the transition team when Barack Obama became President. The Center has also become a hiring hall for the Obama team, filling its positions with former employees (among these was controversial Van Jones — who now is back at the Center).
Apparently, George Soros and his Center are upset that the American people placed a roadblock in their plans when we rose up and painted the nation red. The Center now is providing a blueprint of ways Barack Obama can do an end run around the people’s will by resorting to methods that will strike many of us as being improper-to say the least. Relying on executive orders, interpretation of regulations, rule -making and the like they are collectively a recipe for even more power being assumed by President Obama.
From Tuesday’s Politico Playbook:
[The] Center for American Progress today is releasing a report, “Power of the President,” proposing 30 executive actions the president can take to advance progressive change in the areas of energy, the economy, health care, education, foreign policy, and national security. “The following authorities can be used to ensure progress on key issues facing the country today: Executive orders, Rulemaking, Agency management, Convening and creating public-private partnerships , Commanding the armed forces, Diplomacy.
The New York Times fleshes out these proposals with some suggestions about policy changes across the board. The ideology of George Soros shines through the Center’s report as it justifies this forceful approach to circumvent Congress when it states that:
[The] legislative battles that Mr. Obama waged during his first two years – notably on health care and financial regulatory reform – have created a weariness among the general public with the process of making laws. And it hints it has not helped Mr. Obama politically in the process.
In other words, when Congress passed a variety of laws Americans became dismayed by the horse-trading and bribes that were resorted to by Democrats to impose these policies on us. Instead of compromise and listening to the American people, Soros counsels that more forceful measures should be used to override the will of the American people.
And this is the man the Democratic Party has as their sugar daddy and who various Democratic leaders over the years have defended and praised (for example, as shown by this letter from 11 Democratic lawmakers).
He is certainly a dictatorial daddy.
Sprott Physical Gold Trust Announces Follow On, Will Sequester Another $300 Million In Physical; PSLV Next?
It's a good thing that unlike the silver market, which continues to be in backwardation (see chart), the gold market is fully supplied. Otherwise the just released news from Sprott Asset Management that his Physical Gold Trust (PHYS) is pursuing a $300 million follow on would finally send gold breaking out to $2,000, where it will be sooner or later anyway. Amusingly, contrary to various other blogs' expectations that Sprott is top ticking the market with selling shareholder shelf statements, Sprott is doing just the opposite: "certain funds managed by Sprott Asset Management LP, have agreed to purchase no less than $115 million of Units in this Offering." So yeah, no top tick here. Still, the news that Sprott is about to mop up another $300 million in physical gold from the market will likely send gold quite higher. It appears to have already had an impact on silver, which jumped by $20 cents to another 31 year high on the news, as the market now likely expects a follow on offering in PSLV as well imminently.
TORONTO, ONTARIO--(Marketwire - 04/04/11) - Sprott Physical Gold Trust (the "Trust") (TSX:PHY.U - News)(NYSE:PHYS - News), a trust created to invest and hold substantially all of its assets in physical gold bullion and managed by Sprott Asset Management LP, announced today that it has launched a follow-on offering of transferable, redeemable units of the Trust ("Units") in an aggregate amount of up to $340 million at a price of $12.54 per unit (the "Offering"). Certain lead investors, including certain funds managed by Sprott Asset Management LP, have agreed to purchase no less than $115 million of Units in this Offering.
The Trust will use the net proceeds of this Offering to acquire physical gold bullion in accordance with the Trust's objective and subject to the Trust's investment and operating restrictions described in the prospectus related to this Offering. Under the trust agreement governing the Trust, the net proceeds of the Offering per unit must be not less than 100% of the most recently calculated net asset value per Unit of the Trust prior to, or upon determination of, pricing of the offering.
The Units are listed on the NYSE Arca and the Toronto Stock Exchange under the symbols "PHYS" and "PHY.U", respectively. The Offering will be made simultaneously in the United States and Canada by Morgan Stanley and RBC Capital Markets.
The press releaseTORONTO, ONTARIO--(Marketwire - 04/04/11) - Sprott Physical Gold Trust (the "Trust") (TSX:PHY.U - News)(NYSE:PHYS - News), a trust created to invest and hold substantially all of its assets in physical gold bullion and managed by Sprott Asset Management LP, announced today that it has launched a follow-on offering of transferable, redeemable units of the Trust ("Units") in an aggregate amount of up to $340 million at a price of $12.54 per unit (the "Offering"). Certain lead investors, including certain funds managed by Sprott Asset Management LP, have agreed to purchase no less than $115 million of Units in this Offering.
The Trust will use the net proceeds of this Offering to acquire physical gold bullion in accordance with the Trust's objective and subject to the Trust's investment and operating restrictions described in the prospectus related to this Offering. Under the trust agreement governing the Trust, the net proceeds of the Offering per unit must be not less than 100% of the most recently calculated net asset value per Unit of the Trust prior to, or upon determination of, pricing of the offering.
The Units are listed on the NYSE Arca and the Toronto Stock Exchange under the symbols "PHYS" and "PHY.U", respectively. The Offering will be made simultaneously in the United States and Canada by Morgan Stanley and RBC Capital Markets.
Saudi Oil Minister Says Crude To Hit $300 If Turmoil Spreads To Saudi
Saudi Arabia Goes M.A.D.:
Saudi Oil Minister Says Crude To Hit $300 If Turmoil Spreads To Saudi
Submitted by Tyler Durden on 04/05/2011 08:45 -0400
The strategy of Mutual Assured Destruction has worked so well in the "developed" world (thank you Hank Paulson, Tim Jeethner, Clearinghouse Association et al), it is time to see it in application in the "developing." In an attempt to preempt US doubts about intervening (on the proper side) in the case of escalations in Saudi Arabia (and with the possibility of Yemen becoming a potential Al Qaeda hotbed rising by the hour, this is non-trivial) the former Saudi oil minister Sheikh Zaki Yamani told Reuters on Tuesday that "Oil prices could leap to $200 to $300 a barrel if Saudi Arabia is hit by serious political unrest." We are confident he was merely talking in a very, very hypothetical scenario. After all why scaremonger in a world in which everything is under control?
From Reuters:
"If something happens in Saudi Arabia it will go to $200 to $300," he said.
"I don't expect this for the time being, but who would have expected Tunisia?" he added.
Asked whether the United States was likely to succeed in cutting its dependence on Saudi oil, he said: "From the 1950s, American presidents have been saying this."
U.S. President Barack Obama last week proposed to cut oil imports by a third over 10 years.
Than again with math Ph.D.'s continuing to (front) run US stock markets, and unable to make the mathematical leap between $108 oil and a 4% full year GDP forecast by Goldman (soon to be cut to 1.5%), we are confident $300 oil will have no material impact on stocks, until such time as the Globex hikes margin requirements on the ES which will be the catalyst for the next market crash.
Saudi Oil Minister Says Crude To Hit $300 If Turmoil Spreads To Saudi
Submitted by Tyler Durden on 04/05/2011 08:45 -0400
The strategy of Mutual Assured Destruction has worked so well in the "developed" world (thank you Hank Paulson, Tim Jeethner, Clearinghouse Association et al), it is time to see it in application in the "developing." In an attempt to preempt US doubts about intervening (on the proper side) in the case of escalations in Saudi Arabia (and with the possibility of Yemen becoming a potential Al Qaeda hotbed rising by the hour, this is non-trivial) the former Saudi oil minister Sheikh Zaki Yamani told Reuters on Tuesday that "Oil prices could leap to $200 to $300 a barrel if Saudi Arabia is hit by serious political unrest." We are confident he was merely talking in a very, very hypothetical scenario. After all why scaremonger in a world in which everything is under control?
From Reuters:
"If something happens in Saudi Arabia it will go to $200 to $300," he said.
"I don't expect this for the time being, but who would have expected Tunisia?" he added.
Asked whether the United States was likely to succeed in cutting its dependence on Saudi oil, he said: "From the 1950s, American presidents have been saying this."
U.S. President Barack Obama last week proposed to cut oil imports by a third over 10 years.
Than again with math Ph.D.'s continuing to (front) run US stock markets, and unable to make the mathematical leap between $108 oil and a 4% full year GDP forecast by Goldman (soon to be cut to 1.5%), we are confident $300 oil will have no material impact on stocks, until such time as the Globex hikes margin requirements on the ES which will be the catalyst for the next market crash.
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