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Will U.S. Public Debt Reach $22 Trillion by Feb. 2014?


October 22, 2013
Ron DeLegge, Editor

Just imagine an undisciplined out-of-control spender whose credit limit has just been extended. In other words, they can continue overspending without any accountability. That “they” is the U.S. government.

It’s been almost a week since Congress reached a temporary deal to suspend the U.S. government’s debt ceiling and the Treasury department has already wasted no time by adding another $375 billion in new debt.

Suspension of a cap on U.S. debt, which was previously fixed at $16.69 trillion, means the Treasury department, headed by Jack Lew, can effectively spend whatever amount of money it needs or wants.

How much debt can the U.S. government rack up by the next debt ceiling deadline on Feb. 7, 2014? At the current spending pace of $375 billion per week, U.S. public debt would reach $22.70 trillion.

Numerous times, we’ve written extensively about how the U.S. Treasury had been using accounting shenanigans to avoid going over the previous legal debt limit. We also made the point that any corporation or corporate executive that attempted to use the U.S. Treasury’s same accounting tactics would be charged with fraud. Others too have caught on to the U.S. Treasury’s financial games.

"When you are the largest economy in the world, when you are the safe haven in all circumstances, as has been the case, you can't go into that creative accounting business," said International Monetary Fund Managing Director Christine Lagarde in an interview with NBC News' Meet the Press.

What does the bond market have to say about this?

After reaching a yearly high of 2.97%, the yield on 10-year U.S. Treasuries (NYSEARCA:IEF) has since fallen by 12.5%. Put another way, the bond market is saying that it doesn’t care about the fiscal realities of the U.S. government’s unmanageable debt load. Eventually, when it does start caring, that reality will be first reflected in key price levels highlighted in our latest Technical Forecast

In the meantime, Treasury bulls are celebrating. 

ETFs that benefit from lower yields and higher Treasury bond prices like the ProShares Ultra 20+ Yr. Treasury ETF (NYSEARCA:UBT) and the Direxion Daily 20+ Yr. Treasury Bull 3x Shares (NYSEARCA:TMF) have gained between 8% to 12% since early September. Treasury bonds with long-term maturities (NYSEARCA:TLT) like those tracked by UBT and TMF are most sensitive to changes in interest rates compared to Treasuries (NYSEARCA:SHY) with maturities of less than 10-years.

The table above is from the U.S. Treasury’s daily statement.

The ETF Profit Strategy Newsletter uses a combination of market sentiment, fundamental/technical analysis, market history, and common sense to be on the right side of the market. Since the beginning of the year, 74% of our time stamped ETF picks have turned a profit and our biggest win was a +525% gainer. (through 9/30/13)

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CommentsAdd Comment

OregonBuzz said on October 26, 2013
  Everybody take a deep breath and check out the
Mick Russom said on October 25, 2013
  Put everyone who is a part of or works at the Federal Reserve in prison now.
Patti said on October 24, 2013
  When this latest spending spree is over and Obama exits the WH to spend even more time on the golf course America's children, along with competing for low-wage jobs with the immigrants Obama wants to let in, will be facing a hole they cannot dig out of.
American Infidel said on October 24, 2013
  meh....just call me when the shooting starts....
James R Pawlik said on October 24, 2013
  What we need is for Fox News TV to do is to post these numbers on a background screen on all of its programming: The current real time national debt, the real debt including all entitlements, and the years, months, days, hours and seconds remaining in the Obama presidency! Also I national networked celebration party should be planned with locations requiring no more than two hours travel to celebrate the end of his economic tryranny and slavation of our wonderful republic at the exact momment of the end of his presidency with something a little stronger than tea!
Barry bin Inhalin said on October 24, 2013
  Pelosi: just fix it
Piano Legs: what difference does it make
49% of American citizens getting a check each month: what does this mean to my freebie?
Standard 0il said on October 24, 2013
  $22 trillion is a LOT of pennies -- so maybe this was the "change" Barry was promising us all along!

Stay hungry.
Sam said on October 24, 2013
  Mr. Boothe, Obama may indeed succeed in bankrupting the US even if such an outcome is not his intention. It is likely that he will be among the ashes left behind if the [banking, currency and government] system fails while he is in command.
Sue said on October 24, 2013
  Andrew above, you just keep dreaming.

Nothing to worry about. Hey, why don't we just print up 500 trillion and have free everything for everybody?
(and $5,000 hamburgers)
BoobyTrap said on October 24, 2013
  Dear Harry079:

Spoken and written just like a first-class bureaucrat!

Since you're so smart, maybe you can help your crony D.C. friends to fix

P.S. keep the change, you filthy animal
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