That legislation allowed the government to borrow as much as it wants above the $18.1 trillion debt ceiling that had been in place.
The website that reports the exact tally of the debt said the U.S. government owed $18.153 trillion last Friday, and said that number surged to $18.492 on Monday.
The increase reflects an increasingly common pattern that can be seen in the total U.S. debt level when the debt ceiling is reached.
At the end of 2012, for example, the government hit the debt ceiling, and the Treasury Department was forced to use "extraordinary measures" to keep the government afloat until the ceiling could be increased again. Those measures included decisions to delay issuances of certain debt instruments.
When the ceiling was finally lifted a little more than a month later, the debt jumped $40 billion in a day as the pressure to stay under the ceiling eased, and after nine days, the U.S. was $100 billion deeper in debt.
In February 2013, the debt ceiling was suspended until mid-May. Extraordinary measures were again used through mid October, and the official debt burden hovered in place for more than six months. When the debt ceiling was suspended again in October, the debt exploded by $300 billion the next day.
This time around, the national debt has been frozen at its ceiling of about $18.1 trillion since late January, longer than nine months. The Bipartisan Policy Center estimated that the government had somewhere around $370 billion worth of extraordinary measures to use this time around.
Editors note: Central banks haven't just become a corrupting force. By their very nature . . . central banks are a TOTALLY corrupting force. Always has been and always will be. They must be prohibited world-wide.
Are we observing the money-creating powers of central banks being used to drive up prices in the stock market for the benefit of the mega-rich?
These questions came to mind when we learned that the central bank of Switzerland, the Swiss National Bank, purchased 3,300,000 shares of Apple stock in the first quarter of this year, adding 500,000 shares in the second quarter. Smart money would have been selling, not buying.
It turns out that the Swiss central bank, in addition to its Apple stock, holds very large equity positions, ranging from $250,000,000 to $637,000,000, in numerous US corporations — Exxon Mobil, Microsoft, Google, Johnson & Johnson, General Electric, Procter & Gamble, Verizon, AT&T, Pfizer, Chevron, Merck, Facebook, Pepsico, Coca Cola, Disney, Valeant, IBM, Gilead, Amazon.
Among this list of the Swiss central bank’s holdings are stocks which are responsible for more than 100% of the year-to-date rise in the S&P 500 prior to the latest sell-off.
What is going on here?
The purpose of central banks was to serve as a “lender of last resort” to commercial banks faced with a run on the bank by depositors demanding cash withdrawals of their deposits.
Banks would call in loans in an effort to raise cash to pay off depositors. Businesses would fail, and the banks would fail from their inability to pay depositors their money on demand.
Sen. Elizabeth Warren, D-Mass., reintroduced Tuesday her 21st Century Glass-Steagall Act to rein in banks’ risky behaviors by reinstating certain Glass-Steagall Act protections that were repealed by the Gramm-Leach-Bliley Act.
The same day, a new poll conducted by Lake Research Partners found that voters still want tougher rules for Wall Street five years after the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed into law.
First introduced in the 113th Congress by Sens. Warren and John McCain, R-Ariz., the 21st Century Glass-Steagall Act would separate traditional banks that have savings and checking accounts and are insured by the Federal Deposit Insurance Corp. from “riskier financial institutions” that offer services such as investment banking, insurance, swaps dealing, and hedge fund and private equity activities.
The bill states that it would "clarify regulatory interpretations of banking law provisions that undermined the protections under the original Glass-Steagall" and would make “too-big-to-fail” institutions smaller and safer, minimizing the likelihood of a government bailout.
“Despite the progress we’ve made since 2008, the biggest banks continue to threaten our economy,” said Warren in a statement. “The biggest banks are collectively much larger than they were before the crisis, and they continue to engage in dangerous practices that could once again crash our economy.”
Forcing everyone to spend only by electronic means from an account held at a (government-linked) bank gives technocrats far better tools of social, political and economic control over individuals and communities. This is the war against cash.
“Governments, at least modern western governments, have always hated cash transactions. Cash is private, and cash is hard to tax. So politicians trump up phony reasons like drug trafficking and money laundering to win support for bad laws like the Bank Secrecy Act of 1970, which makes even small cash transactions potentially reportable to the Feds.”
“Today cash is under attack like never before. Ultra low interest rates are the norm for commercial bank accounts. In Europe, as the ECB ventures into negative nominal interest rates, certain banks threaten to charge customers for depositing cash. Meanwhile, certain European bonds now pay negative yields, effectively turning them into insurance products rather than financial assets. And some economists now call for the outright abolition of cash, which shows just how far some will go in their crazed belief that economic prosperity can be commanded by forcing us to spend rather than save.”
The War on Cash is real, and it will only intensify from here on out. Dr. Joe Salerno delivers a powerful and comprehensive breakdown of how it’s happening…
Janet Yellen is very alarmed that some members of Congress want to conduct a comprehensive audit of the Federal Reserve for the first time since it was created. If the Fed is doing everything correctly, why should Yellen be alarmed? What does she have to hide? During testimony before Congress on Tuesday, she made “central bank independence” sound like it was the holy grail. Even though every other government function is debated politically in this country, Yellen insists that what the Federal Reserve does is “too important” to be influenced by the American people. Does any other government agency ever dare to make that claim? But of course the Federal Reserve is not a government agency. It is a private banking cartel that has far more power over our money and our economy than anyone else does. And later on in this article I am going to share with you dozens of reasons why Congress should shut it down.
The immense power wielded by the Federal Reserve is clearly demonstrated whenever Janet Yellen speaks publicly. On Tuesday, her comments about interest rates sent stocks to brand new record highs…
Yellen, in her semi-annual testimony before the Senate banking committee, used a word familiar to investors when she reiterated that the central bank will be “patient” on raising interest rates for the first time since the 2008 financial crisis. Traders took that as a sign that interest rates would remain unchanged until autumn.
The Dow Jones Industrial Average rose 92.35 points (0.5%) to 18,209.19, while the Standard & Poors 500 gained 5.82 points (0.3%) to 2,115.48, both eclipsing Friday’s record closes.
But Yellen was also unusually defensive on Tuesday. The “Audit the Fed” bill that is being sponsored by Rand Paul (among others) has her really freaked out. The following comes from the Hill…
Appearing before the Senate Banking Committee, Yellen was on the defensive, as Republicans questioned how the Fed conducts monetary policy and Democrats put forward ideas for getting tougher on Wall Street.
In the midst of all of it, Yellen generally argued the Fed was designed as an independent entity for a reason — and it would be best not to change it.
“Central bank independence in conducting monetary policy is considered a best practice for central banks around the world,” she said. “Academic studies, I think, establish beyond the shadow of a doubt that independent central banks perform better.”
In fact, she went so far as to mention the “Audit the Fed” bill by name…
A GOP-controlled Congress has given the bill its best chances yet of passage, and that renewed interest led Yellen to deliver her most spirited opposition yet.
“I want to be completely clear,” she said. “I strongly oppose Audit the Fed.”
Yellen argued the audit measure would allow politicians to second-guess the Fed’s decisions, which, in turn, would weaken the central bank. And the ultimate victim of that process, she said, would be the U.S. economy.
Of course, what Goldman has done is hardly groundbreaking: as the following chart from Bloomberg shows, Wall Street's "revolving door" tradition has been working in overdrive to make sure that all American regulators are staffed with former (and future) Wall Street employees.
This epic pile up of conflicts of interest assures that the great bezzle - the robbery of the middle class by the 0.1% - can continue without any interruption, a great case in point being today's latest HSBC Swiss bank account scandal.
Are we on the verge of a major worldwide economic downturn? Well, if recent warnings from prominent bankers all over the world are to be believed, that may be precisely what we are facing in the months ahead. As you will read about below, the big banks are warning that the price of oil could soon drop as low as 20 dollars a barrel, that a Greek exit from the eurozone could push the EUR/USD down to 0.90, and that the global economy could shrink by more than 2 trillion dollars in 2015. Most of the time, very few people ever actually read the things that the big banks write for their clients. But in recent months, a lot of these bankers are issuing such ominous warnings that you would think that they have started to write for The Economic Collapse Blog. Of course we have seen this happen before. Just before the financial crisis of 2008, a lot of people at the big banks started to get spooked, and now we are beginning to see an atmosphere of fear spread on Wall Street once again. Nobody is quite sure what is going to happen next, but an increasing number of experts are starting to agree that it won’t be good.
Let’s start with oil. Over the past couple of weeks, we have seen a nice rally for the price of oil. It has bounced back into the low 50s, which is still a catastrophically low level, but it has many hoping for a rebound to a range that will be healthy for the global economy.
Dec. 11 (Bloomberg) — The U.S. House is set to pass a $1.1 trillion spending bill that includes a banking provision opposed by many Democrats as a giveaway to large institutions.
That “provision” has nothing to do with government spending; it un-does the Dodd-Frank prohibition on federally-insured institutions trading derivatives without any capital behind them.
In other words, any institution that wants to do that has to trade them in non-insured subsidiaries, which means in turn that they can fail without government consequence. That makes them more-expensive, since the counterparty will (correctly) perceive them as more-risky since there is no means to go back to the government and force them to cough up the deficiency.
“I expect this bill will receive bipartisan support and pass,” House Speaker John Boehner told reporters today in Washington.
Of course he does. It is bipartisan to screw the taxpayer, of course, and you, dear citizen, keep trying to insist that if you just vote the right way things will get better for you.
Uh, no, they will not. They will get worse because irrespective of which party you vote for you’re going to get this sort of crap rammed up your chute. There is no reason for the banks to want this sort of provision other than to force you to cover their bad gambling debts exactly as they did in 2008 and 2009.