Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Stunning U.S. Government Debt Increase In Past Few Days…. While No One Noticed

Interest-Rates / US Debt Oct 06, 2017 - 06:28 PM GMT

By: Steve_St_Angelo

Interest-Rates

As the stock market continues to rise on the back of some of the worst geopolitical, financial, and domestic news, the U.S. Treasury has been quietly increasing the amount of government debt, with virtually no coverage by the Mainstream or Alternative Media.  So, how much has the U.S. debt increased in the past few days?   A bunch.

The surge in U.S. debt that took place over the past two days all started when the debt ceiling limit was officially allowed to increase on Sept 8th.  In just one day, the U.S. Treasury increased the public debt by $318 billion:


(chart courtesy of TreasuryDirect.gov)

The was the first time in U.S. history that the public debt rose over $20 trillion.  I mentioned this in my article, The U.S. Government Massive ONE-DAY Debt Increase Impact On Interest Expense & Silver ETF:

The U.S. Treasury will have to pay out an additional $7 billion interest payment for the extra $318 billion in debt it increased in just one day.  Again, that $7 billion interest payment is based on an average 2.2% rate multiplied by the $318 billion in debt.  Now, if we compare the additional $7 billion of U.S. interest expense to the total value of the silver SLV ETF of $5.8 billion, we can plainly see that printing money, and increasing debt becomes a valuable tool for Central Banks to cap the silver price.

Thus, when the U.S. Treasury increased the public debt by $318 billion, it will also have to pay an additional $7 billion in an annual interest payment to finance that debt.  However, that large one-day debt increase was over three weeks ago.  What’s been going on at the U.S. Treasury since then?  Let’s just say; they have been very busy… LOL.

On the last update in September, the U.S. Treasury increased the debt by nearly $40 billion on the very last day of the month:

(chart courtesy of TreasuryDirect.gov)

As we can see, the U.S. public debt increased from $20,203 billion ($20.203 trillion) on Sept. 28th to $20,245 billion on Sept 29th.  Overall, the U.S. debt increased $83 billion more since the $318 billion one-day increase on Sept 8th.   Which means, the total debt increase was $400 billion in a little more than three weeks.  However, the U.S. Government must be making up for lost time when the debt ceiling was frozen from March 15th to Sept 7th.

According to TreasuryDirect.gov website, the U.S. public debt ballooned by another $100 billion in the first two days of October:

(chart courtesy of TreasuryDirect.gov)

Alright, it only increased by $99 billion from $20,445 billion to $20,344 billion, but I’d rather use $100 billion because it has a better ring to it.  So, in less than a month, the U.S. Government public debt increased by a stunning $500 billion.  Along with the half trillion Dollars worth of new public debt, the U.S. Treasury will have to pay an additional $11 billion a year in interest payments based on an average 2.2% rate.

The notion that the Fed will continue to increase interest rates and begin to liquidate its inventory of MBS – Mortgaged Backed Securities that no one wanted in 2009-2010, as well as some of its high-quality Treasury toilet paper, is pure bollocks when they are handing out money hand over fist.  As I mentioned in my article linked above, if the interest rate went back to the 6.4% rate as it was in 2000, the U.S. Treasury interest on the debt would surge to more than $1.3 trillion.

Thus, our annual interest payment of $1.3 trillion (based on a 6.4% average interest rate) would account for one-third of the $3.9 trillion 2016 budget.  Of course, this could not fly as our annual deficit would jump from $587 billion (2016) to $1.4 trillion.  Actually, I believe we are going to see a $1+ trillion annual deficits in the next several years.

It is impressive to see how quickly the U.S. Treasury is increasing the public debt:

Again, this additional $182 debt increase comes after the $318 billion one-day increase on Sept 8th.  No wonder, China and Russia are working together on alternative Gold-Backed Yuan Oil trading benchmark as highlighted in the article, A Failing Empire, Part 2: De-Dollarisation – China and Russia’s Plan From Petroyuan To Gold:

For China, Iran, and Russia, as well as other countries, de-dollarization has become a pressing issue.

The number of countries that are beginning to see the benefits of a decentralized system, as opposed to the US dollar system, is increasing.

  1. Iran and India, but also Iran and Russia, have often traded hydrocarbons in exchange for primary goods, thereby bypassing American sanctions.
  2. Likewise, China’s economic power has allowed it to open a 10-billion-euro line of credit to Iran to circumvent recent sanctions.
  3. Even the DPRK seems to use cryptocurrencies like bitcoin to buy oil from China and bypass US sanctions.
  4. Venezuela (with the largest oil reserves in the world) has just started a historic move to completely renounce selling oil in dollars, and has announced that it will start receiving money in a basket of currencies without US dollars. (This is not to mention the biggest change to have occurred in the last 40 years).
  5. Beijing will buy gas and oil from Russia by paying in yuan, with Moscow being able to convert yuan into gold immediately thanks to the Shanghai International Energy Exchange.

As the U.S. Treasury and Federal Government continues printing money and increasing its debt by $500 billion at a clip, the rest of the world is no longer going to sit around and wait for the negative ramifications.

Lastly, I have one more interesting chart to share before I conclude this article.  I find it quite ironic (HILARIOUS) that the gold and silver price PEAKED on the very same day the debt ceiling was increased and another $318 billion of debt was added to the U.S. Govt balance sheet while the Dow Jones Index bottomed and surged by 1,000+ points:

I gather this chart wraps up the situation nicely.  As the U.S. Govt pumps up the market with another $500 billion in debt, the stock market continues to move into BUBBLE TERRITORY.  Unfortunately, precious metals investors have to be patient until the Fed and U.S. Treasury completely BLOW UP the market.

Check back for new articles and updates at the SRSrocco Report.  You can also follow us at Twitter, Facebook and Youtube below:

2017 Copyright Steve St .Angelo - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules