Gold / Debt Limit Chart

Interesting chart correlating the price of gold with the raising of the debt limit ceiling.

Source: zerohedge

1995-1996 Govt Shutdown Impact on Interest Rates

Interestingly enough, interest rates declined during the 1995-1996 government shutdown. And, coincidentally or not, interest rates are declining now.

1995-96 Government Shutdown
SUMMARY:

From November 14 through November 19, 1995 and from December 16, 1995 to January 6, 1996 the U.S. government was shut down as a result of a budgetary impasse between Congress and the White House. The shutdown was precipitated by a dispute between Democratic President Bill Clinton and Republican Speaker of the House Newt Gingrich over domestic spending cuts in the fiscal year 1996 budget and resulted in a bipartisan agreement to balance the budget in seven years' time.

http://bancroft.berkeley.edu/ROHO/projects/debt/governmentshutdown.html

1995-1996: 10 Yr Treasury Note Rate
Crisis Began November 14, 1995: 5.97%
Crisis End January 6, 1996: 5.69%

Federal Debt Rollover in August: $467 Billion

Comments: August is going to be a very tumultuous month.

First, we have the debt ceiling issue to contend with. It's been estimated that X-Day (the date after which Treasury will not havesufficient cash to pay ALL of its bills) is going to be sometime between August 2 and August 9.

Next, if and when we get over the X-Day hurdle, there is the matter of $467 Billion of Treasury debt that will need to get financed in August. $467 Billion in one month, that is simply a staggering figure.

Interesting that interest rates spiked higher last week, just after this report was released privately.

Originally posted at Zerohedge: link

Debt Ceiling Analysis