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I’d put a large wager that nobody at Fitch involved in these pronouncements knows that US Treasuries are repaid with “Certificates of Indebtedness” (CoI), and that those are acceptable by Treasury in payment of taxes.
The ‘debt ceiling’ doesn’t prevent the issuing of CoI, it notionally prevents the Treasury ‘cashing’ the CoI.
You can of course cash them with somebody else. Somebody with a US tax bill to pay for example…
Unprecedented rate increases by Biden Fed creating chaos in debt markets…
Fitch: “ Fitch pointed to “the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.”
Doesn’t say anything about not being able to repay, etc…
As I put in a comment on Bill's blog yesterday:
ReplyDeleteI’d put a large wager that nobody at Fitch involved in these pronouncements knows that US Treasuries are repaid with “Certificates of Indebtedness” (CoI), and that those are acceptable by Treasury in payment of taxes.
The ‘debt ceiling’ doesn’t prevent the issuing of CoI, it notionally prevents the Treasury ‘cashing’ the CoI.
You can of course cash them with somebody else. Somebody with a US tax bill to pay for example…
Unprecedented rate increases by Biden Fed creating chaos in debt markets…
ReplyDeleteFitch: “ Fitch pointed to “the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.”
Doesn’t say anything about not being able to repay, etc…