US ECONOMY- DANGER SIGNS– Essential Insights on Time – Dave Gonigam

March 13, 2017 – 5 Minute Forecast – Essential Insights on Time – Dave Gonigam

This is getting real old, real quick…

The USA Debt Reduced by More Than $ 60-Billion Since the Inauguration of President Donald Trump

President Donald Trump

The preceding appeared Friday (March 10, 2017), at one of the more infamous websites that belong to a portion of the mediasphere that one wag labeled “InfoTrump” — a funhouse mirror image of the blinkered mainstream in which the “outsider” president can do no wrong.

Now, it’s true that if you look at the U.S. Treasury’s “Debt to the Penny” website, the national debt has declined since Trump took office.     

But as we said when this subject came up two weeks ago, the numbers fluctuate from day to day and week to week. Golly gee, the Treasury just happens to be taking in billions right now as people file their 1040s. And this year, in an effort to crack down on fraud, the feds are delaying refunds to people claiming the earned-income tax credit.

We’re confident the numbers will resume their usual trajectory soon enough.

But that’s not the whole story today. The rest of the story is far more interesting… and we daresay the president’s most loyal supporters ignore it at their own peril.

The rest of the story is this: The Deep State is monkeying with Uncle Sam’s books to push the government toward an imminent default and spark a crisis for Trump.

You won’t see that looking at the Debt to the Penny page. Our own David Stockman — who knows this stuff inside-out, having been Reagan’s first budget director — tells us you have to go to a more obscure portion of the Treasury’s website, the Daily Treasury Statement.

Under an entry that says “Federal Reserve Account — Closing balance today,” you find the Treasury’s cash balance. These are the liquid funds Uncle Sam has to work with on any given day.

For much of last year, the number had been rising. By Oct. 24, when it seemed Trump was toast, the total was $435 billion.

As of last Thursday, the most recent report available, the total had dwindled to only $34 billion.

If you’re wondering whether this drain on Uncle Sam’s funds has something to do with the pending expiration of the debt ceiling, the answer’s YES. It has everything to do with it.

Remember… President Obama cut a “zombie budget” deal with House Speaker Paul Ryan in October 2015, suspending the debt ceiling until after the election. The debt ceiling comes back into force on Wednesday.

Throughout 2016, the Obama Treasury Department was building up that closing balance on the Daily Treasury Statement. “The department’s bureaucrats,” David explains, “had been issuing debt hand over fist and piling up a cash hoard, apparently, for the time after March 15, 2017, when President Hillary Clinton would need to coax another debt ceiling increase out of the Congress.”

But since the election, the career civil servants have reversed the process. They’re tapping this cash hoard to pay down maturing Treasury debt.

“The bureaucrats,” says David, “have apparently decided to sabotage what they undoubtedly believe to be the usurper in the White House. To this end, they’ve been draining Trump’s bank account rather than borrowing the money to pay Uncle Sam’s monumental bills.”

What’s more, this drain on the Treasury’s cash hoard is one of the reasons stocks have been flying so high since the election.

Wall Street owns scads of Treasury debt. If the Treasury is paying that off as it matures, that’s a huge new pile of money Wall Street can put to work bidding up stocks.

“Uncle Sam pumped a veritable tsunami of cash into the canyons of Wall Street,” David says. “And it was that ‘stimulus’ which fueled the Trump-O-Mania rally — even as the talking heads peddled the Trump Stimulus meme and the second coming of Ronald Reagan.”

But that stimulus “begins to die on Wednesday, March 15” David explains, “and the screaming aberration of the past four months — that is, a broke Uncle Sam paying down his debt — goes into reverse.”

As always, the Treasury can perform further accounting tricks to stay under the debt ceiling… but David says those tricks will have run their course not long after Memorial Day. After that, if you’ve been reading us for a while, you know David expects an ugly showdown between the White House and fiscal “hawks” in Congress.

And don’t forget… Not only does the debt ceiling come back into effect on Wednesday, the Federal Reserve also meets on Wednesday to raise interest rates.

Result: “Both the Fed and the U.S. Treasury,” says David, “will be draining hundreds of billions from Wall Street on a recurring basis for the first time in 20 years.”

If you suspect that will send the stock market into a tail spin, David says you’re right… but it’s even worse than that.

Best regards,

Dave Gonigam
The 5 Min. Forecast

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  • Clyde Duncan  On March 14, 2017 at 5:55 pm

    Tick, tick, tick…

    When we left you yesterday, the U.S. Treasury had all of $34 billion in cash on hand. After we went to virtual press, the Treasury issued a new Daily Treasury Statement. The total is now down to $30 billion.

    Tick, tick, tick…

    As a reminder, the total was $435 billion during the run-up to Election Day last year. Bubble Finance Trader editor David Stockman — who earned his green-eyeshade credential as Reagan’s budget director — can’t help but conclude that anti-Trump career bureaucrats at the Treasury have planted a time bomb within Uncle Sam’s books, purposely spending down that cash hoard.

    They’re pushing the government toward default at the very moment the debt ceiling comes back into force — tomorrow [Wednesday, 15 Mar 2017].

    Tick, tick, tick…

    These numbers matter even more than you’d think by looking at them.

    For several years, your editor was of the opinion that the government can’t default if it can still make the interest payments on the national debt.

    For instance, … during fiscal year 2016, interest expense on the debt was $212 billion… while total tax receipts were just shy of $3 trillion. No problem, right?

    Wrong, said Morgan Stanley economist David Greenlaw in 2011. During the debt ceiling drama of that year, he wrote an interesting report. “While it is true that the government takes in a good deal more in receipts than it pays out in interest on the debt over the course of a full year, on certain days, the government takes in much less than it pays out.

    “For example, the Treasury has an interest payment of about $30 billion due on Aug. 15. On that day, it will take in about $15 billion in tax receipts, so it won’t even have enough to make the interest payment alone.”

    Again, the Treasury’s cash on hand right now totals $30 billion. If the Treasury can’t issue new debt and a big interest payment comes due on a given day… then what?

    No, the “Kaboom” moment won’t come tomorrow… but it also won’t be the “September or October” time frame you might’ve run across from mainstream sources. David Stockman believes the fuse will run out before Memorial Day [29 May 2017].

    And almost no one in Washington sees it coming. “Of course” Congress will raise the debt ceiling, Senate Majority Leader Mitch McConnell said last week. “The government is not going to default.”

    “I think that all of us believe that a debt ceiling increase with the appropriate amount of real balanced-budget directives is accomplishable under this president and a unified government,” says Rep. Mark Meadows (R-North Carolina), chairman of the House Freedom Caucus.

    But what happens in the midst of all that “accomplishable” horse trading? Here’s the problem, says David: “The ticking debt ceiling clock will mightily interfere with — if not block completely — the process of congealing an agreement within the GOP caucuses on the FY 2018 budget resolution.

    “In fact, the legislative and political maneuvering in the run-up to this summer’s debt ceiling vote will powerfully concentrate the minds of the backbench fiscal hawks; it will remind them that their fate under the massive deficits embedded in the Trump stimulus will be to walk the plank time after time to raise the debt ceiling!”

    Bottom line: “There is no pathway to a House and Senate majority for a multi-trillion-dollar debt ceiling increase.”

    [Ed. note: Not only does the debt ceiling come back into force tomorrow, the Federal Reserve will act to raise interest rates. David says that one act will trigger a chart formation that signals a crucial turning point for the markets.

    Dave Gonigam
    The 5 Min. Forecast

  • Clyde Duncan  On March 14, 2017 at 6:09 pm

    While we are awaiting for tomorrow to come around in the USA …..

    There is more:
    Preet Bharara, Fired USA Attorney-General, Had Donald Trump In Purview
    | Rachel Maddow | MSNBC

  • Clyde Duncan  On March 15, 2017 at 4:39 pm

    With Russia Meddling in U.S.A. Affairs, Putin’s in Over His Head

    Blowback from the investigation into Russian interference in the U.S.A. election is starting to damage the Kremlin’s interests.

    Anshel Pfeffer | Haaretz

    Vladimir Putin is often described as a canny poker player, taking advantage of his opponents’ obvious weaknesses to make the best of the rather lousy cards Russia’s dire situation has dealt him. As the leaks from the investigation into links between President Donald Trump’s team and the Kremlin turn into a steady stream, it’s starting to look like for once, Putin has overplayed his hand.

    Just a few months ago, after Britain’s “Leave” vote in the Brexit referendum and Trump’s shock victory in the U.S. elections, it seemed that Putin had laid down a royal flush. He had dramatically weakened the two international organizations he hates the most: the EU, which placed damaging economic sanctions on Russia following its invasion of Ukraine in 2014, and the Western defense alliance NATO, which Putin believes is encroaching on Russia’s borders and vital sphere of influence. Instead of the professional stateswoman Hillary Clinton, who had openly criticized his policies, he was to have in the White House an inexperienced braggart who admired him as a strong man who had restored Russia’s confidence.

    But while the Kremlin’s media celebrated Trump’s victory in the first few weeks, their accolades have been much more muted recently and news organizations are even beginning to criticize the new administration. It is clear now that Putin, like nearly every other analyst and pundit in the world, did not expect Trump to actually win. Now that he has, the blowback against what was clearly an attempt by Russia to interfere with – if not influence – the U.S. elections could turn out to be extremely damaging to Putin’s interests.

    One senior Israeli intelligence official, a seasoned Kremlin-watcher, explained that the Russians believe their use of online disinformation and hacking simply mirrors tactics pioneered by the Americans. Essentially, they see it as a defense strategy.

    In some cases, like the recent parliamentary election in Montenegro, a tiny Balkan nation which Russia sees as within its orbit, it is conceivable that the Kremlin planned to help a pro-Russian party come to power. As far as a powerful adversary as the U.S.A. is concerned, the Russian intention was simply to muddy the waters and create some internal trouble for the expected President Clinton instead of embarking on her ambitious foreign policy of challenging Russia in the Middle East and other regions.

    As a former intelligence officer, Putin knows fully well that even an American president cannot purge his intelligence community and military establishment of tens of thousands of professional officers capable of making independent assessments. While Trump may be surprised at the damaging leaks now coming out of the intelligence and security services he officially commands, Vladimir Putin certainly is not.

    In the short term, the chaos in Washington may be working in Russia’s favour, giving it more of a free rein to pursue its agenda, but Trump’s victory, and the extent to which the unintended success of Russia’s online disinformation and hacking may have helped it, is already proving to have problematic implications for the Kremlin.

    Here are a few of those unintended consequences:

    Resistance to Russia is Now Bipartisan – In one of the 2012 presidential debates, Barack Obama thrilled his Democratic supporters when he zinged Republican candidate Mitt Romney who considered Russia the greatest foreign threat facing America: “Governor, the 1980s called and they want their foreign policy back.” It took over four years, but at least on this issue, the Democrats have firmly departed from Obama’s position. President Trump may still yearn for Putin to be his friend, as he once tweeted, but for now both main parties regard him as a major threat.

    No Chance of Sanctions Relief – Any prospect of Putin achieving one of his main goals of removing both American and European sanctions from his economy seem increasingly remote right now. Any hint of support for sanction relief from an administration under investigation for ties to the Kremlin will be met with a massive outcry.

  • Clyde Duncan  On March 16, 2017 at 12:23 am

    Dear Friends,

    The new Muslim ban was scheduled to go into effect tomorrow. But tonight, a federal court in Hawaii issued a nationwide restraining order that effectively blocks the ban.

    This ruling is temporary, but it’s a strong victory that can embolden our resistance.

    The court stated: “The illogic of the Government’s contentions is palpable. The notion that one can demonstrate animus toward any group of people only by targeting all of them at once is fundamentally flawed.” Today’s ruling supports our position that the ban represents religious animus toward Muslims that is both dangerous and unconstitutional.

    In the next few days, we invite you to show your solidarity and support at events planned across the country, including San Francisco, Los Angeles, San Diego, and Chicago.

    Together we are making a difference. Last week, you called Congress, went on strike, reached out to your neighbours, posted online, and showed up in the thousands. We are demonstrating that our resistance is not a flash of protest but a sustained movement. In the wake of recent hate crimes, raids, and threats of more to come, every act of solidarity says to Muslims, refugees, immigrants, Sikhs, and all those in harm’s way: We see you, sisters and brothers. And we will not stop fighting by your side. This is #RevolutionaryLove.

    Thank you — and may you take a moment to breathe in this moral victory. Tonight I breathe with you.

    In Chardi Kala — ever-rising high spirits,

    Valarie Kaur
    Director, The Revolutionary Love Project
    Founder, Groundswell Movement

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