A Funny Thing Happened On The Way To The Treasury

Looks like the United States Government is officially over it's debt ceiling limit. More interestingly, the world financial system hasn't come crashing down [yet]. Here are a few excerpts from today's Publication of Daily Treasury Statements. A footnote on page 7 informs us:

* Act of February 4, 2013 temporarily suspended the debt limit through May 18, 2013.

We find that rather funny in itself. Did anyone (even in Congress) actually know they voted to pretend we don't have a statutory debt limit? <waiving parts=hands>Ignore that, look over here.</waving> Moving along now, just above that line we are given an important piece of information:

Statutory Debt Limit    *    *    *    $ 16,394,000

Ok, I hope you aren't laughing yet, because here comes the real punch line. Just above that informative piece in the column labeled 'Closing balance today':

Total Public Debt
   Subject to Limit        $ 16,710,017

If you aren't accustomed to high finance and really big concepts like "national debt", look carefully at the two numbers. Which one is bigger, the statutory limit or today's closing balance?

Yes indeed boys and girls, your illustrious leaders have blasted right on past the national debt limit and spent an extra $316 BILLION of your hard earned money. And of course we are to believe they'll have it all fixed before May 18th

If you have access to this article on a smartphone, you might want to bookmark it and pull it out when some cop pulls you over for speeding. Showing her the details, assure her with, "It's ok officer, our federal government has provided precedence for putting aside the rule of law for the expediencies of the day." Then present your expediency and assure here no one is harmed by your driving, so you should both just go on your way as you'll be complying with the speed limit tomorrow after you've had time to fix things.

I mean seriously, you've just read this and that's exactly what you are going to do, right? No harm, no foul, screw the law. It's a dumb law anyway.

For more fun, mark your calendar to watch the security markets in the third week of May. Option expiration for May is on the 17th. You might want to buy those June puts now while they are cheap.

Why You Don't Want Government Controlling Social Security

First, they promise to take care of you and your future financial welfare:

The National Pensions Reserve Fund was established in April 2001 to meet as much as possible of the costs of Ireland's social welfare and public service pensions from 2025 onwards, when these costs are projected to increase dramatically due to the ageing of the population. The Fund is controlled and managed by the National Pensions Reserve Fund Commission. The Commission's functions include the determination and implementation of the Fund's investment strategy in accordance with its statutory investment policy. This policy requires that the Fund be invested so as to secure the optimal total financial return provided the level of risk is acceptable to the Commission.

(source: NPRF Home Page)

Then after they make a mess out of protecting your current financial welfare, they threaten your future welfare to compensate for their screw-ups.

In the first six months of 2011, the Government liquidated €10bn worth of National Pension Reserve Fund assets in order to contribute money to the EU/IMF bailout package.

Including this €10bn set aside for the support programme, the total fund size at the end of June was €20.8bn. This also comprises of the discretionary fund and directed portfolio, as well as bank investments of €5.5bn.

The discretionary fund has now been reduced in size to €5.3bn as a result of the liquidation of assets, according to the quarterly portfolio and performance update published today.

Including shares held in Bank of Ireland and AIB, the directed portfolio is worth €15.5bn.

(source: Business Leadership News)

If you're thinking, "That's ridiculous, that would never happen here" you must be twelve years old.

Banks Are Not Intended to be Safe Place To Keep Money

We've been seeing rules like this lately with the phrase "prohibits branches of banks … from operating primarily for the purpose of deposit production."

Let that sink in for a minute --- if you want to run a bank, you can do X, Y, and Z, and many other things, but if you have a primary purpose of attracting deposits, it's a no-no -- slap you on the wrist, bad boy!!

Now put on your consumer hat. Why do you put your money in a bank? Isn't the primary purpose to ensure your wealth is in a safe place so you don't have to stash a bunch of money in a steel, tamper-proof, fire-proof, locked-down safe, and then carry wads of cash around where thieves can separate you from your wealth when you go buy something? From your point of view, a bank's primary purpose is to be a safe place to keep your money.

But the bank is prohibited from primarily attracting your interest in their safekeeping services.

We can't speak for you, but that explains a lot.

American Justice on Trial

Uggh, this is certainly off topic, but the significance of the mockery of the American Justice system is too important to ignore. We won't comment any more on this, but readers should take the full 10 minutes to watch this whole video.

The first eight minutes are the setup that describes why Americans should cherish their legal system, built upon the foundation that the accused is guilty until proven innocent.

...if that man is tried in an American court under the American system of justice, then there can only be one verdict rendered, and that verdict is, not guilty“
- William Whittle

Don't miss the legal basis for that conclusion.