February Fiscal Wrap up

Numbers are in for February.

Lets review the financial record of what we did last month.

Net withdrawals for the month were $443B while we took in net deposits of $215B, resulting in an ex post deficit of $228B for the month.

Both this monthly 443B net withdrawal number and the monthly fiscal delta of  -228B are quite large on a relative basis and should result in adequate short term provision of our monetary system and avoidance of any short term economic system instability and malfunction/failure.

A seasonal feature for February was the refunding of Personal Income Taxes of $107B which accounted for 24% of net withdrawals for the month and should be supportive of demand over at least the next few weeks as these refunds will also now continue into March although projected to be accomplished at a reduced rate.

We are looking ahead with caution towards the effect upon these flows of the so-called fiscal "sequestration" which allegedly may reduce these critical flows within the monetary system in March; and will monitor these flows MOM to see if there is any detectable change in them.

We are also looking ahead with caution to April when this situation will be reversed and any liabilities for income taxes NOT withheld throughout CY 2012 will then be payable by April 15th.