1. Is July 22, 2011 on the Mayan calendar as the official start of 2012?
Should be.
2. See: http://online.wsj.com/article/SB10001424052702303763404576418231837713932.html for some details of the immediate effects of the US government not raising its debt ceiling.
(1) First, the credit rating agencies declare the US in default since it will not have the ability to pay all of it's financial obligations. Immediately, all other forms of credit linked to the US treasuries will also be re-rated downwards driving the interest rates up in credit cards, home loans, and so on.
(2) Second, the payments due from the Federal government made through the Federal Reserve will be limited to the amount is collected in tax. The estimate batted around is $140bn, although last year in July the amount of tax revenue was about $160bn.
(3) the main payments due from the Fed inlude:
(a) Aug 3: $23bn social security checks
(b) Aug 4: $90bn government debt matures
(c) Aug 15: $30bn interest payments due
(d) $467bn of US government bonds mature in month of August
See: http://online.wsj.com/article/SB10001424052702303763404576418231837713932.html.
(4) Who will not be paid? Say 44% of the US financial obligations can't be paid. That's around 600,000 to 700,000 government employees becoming walking zombies.
Restless times may turn bitter.
No comments:
Post a Comment