IT'S ALMOST HERE !!!

http://www.zerohedge.com/news/2015-10-19/traders-are-panic-selling-t-bills-after-jack-lew-warns-terrible-debt-limit-accident

Traders Are Panic-Selling T-Bills After Jack Lew Warns Of "Terrible" Debt Limit Accident


Submitted by Tyler Durden on 10/19/2015


The one-month-ish Treasury Bills that mature November 18th are collapsing. Following comments this morning by Treasury Secretary Jack Lew that the US will run out of cash on November 3rd and his warning of a "terrible" debt limit accident, the 11/18/15 T-Bills have seen yields explode from -1bp to 7bps - an unprecedented 8bps spike as investors panic-sell beyond the deadline.



 

WI 1month bills are over 11bps!

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"Our best estimate is November 3rd is when we'll exhaust what we call extraordinary measures; those are things we can do to manage things. I will run out of things that I can manage on November 3rd," Lew told CNBC's "Squawk Box."
 
Lew insisted that a hike is not a commitment to new spending but an ability to pay the bills on money already spent. Conservatives have in the past targeted the borrowing limit as leverage in budget negotiations.
 
Lew dismissed the idea that the government could prioritize what bills to pay. "Once you no longer consider all of your obligations rock solid, you're no longer the full faith and credit of the United States."
 
"It's also not possible to pick and choose. We have about 80 million transactions a month. Our system wasn't set up not to pay," he added.

So that leaves less then 2 weeks for the dysfunctional GOP to agree to a debt ceiling increase... is it any wonder that traders are dumping anything beyond Nov 3rd en masse...

 



 

As The Wall Street Journal adds,

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A selloff that started on Friday in T-bills deepened on Monday, sending the yield on the bill maturing on Nov. 12 to the highest level since 2013, when last time the market was rattled by debt ceiling fear. Monday's selloff spread to all four bills maturing during the course of November.
 
Few expect US to default because debt ceiling is a political issue and investors have experienced such episodes in 2013 and 2011. Still, many cut exposure to bills maturing close to the deadline of debt-ceiling to avoid hassels, as suggested by bill yields in December and January that traded below those on November. The yield on the bill due on Nov. 12 was recently at 0.17%, vs Friday's closing level of 0.036% and 0.005% Thursday.

For now concerns about Lew's warning of a terrible debt accident are limited to the bond market. As we said over the weekend when noting the record negative 1 Year Japanese T-Bills, "this is happening while equities ignore absolutely everything taking place in the world and trade purely on technicals and "hope" for even more future liquidity flow out of central banks."

One hopes the republicans who need to quickly decide how they will extend the debt ceiling are as concerned about the T-Bill market as they have been about stocks, or else the market will need to stage a violent wake up call in the next 2 weeks to mirror what is already taking place with T-Bills.

*  *  *

We leave it to Barclays Joseph Abate to conclude:

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"This is the beginning...Nervousness is ratcheting higher”

http://www.shtfplan.com/headline-news/highly-respected-economist-warns-hyperinflation-is-on-the-table-it-will-be-completely-uncontrollable_10182015


Highly Respected Economist Warns: “Hyperinflation Is On The Table… It Will Be Completely Uncontrollable”


Thibaut Lepouttre is a highly educated and well respected economist from Belgium. But unlike many of his counterparts who often toe the line of mainstream politicians and financial pundits, he’s not one to sugarcoat the seriousness of the current global economic, financial and monetary environment. According to Lepouttre, while the Federal Reserve has worked feverishly to prevent a widespread destabilization of the system, their machinations will soon be revealed as an abject failure.
Whereas many of his colleagues suggest the possibility of inflation is an unlikely scenario, Lepouttre says that we will see it begin to manifest in the near-term in the form of higher prices for essential resources. In his latest interview he explains why we’re within the prime target dates for inflation to take hold, the snowball effect that will lead to uncontrollable hyperinflation, and how to strategically position assets ahead of this unprecedented monetary event.

Quote :

There is no doubt that the Federal Reserve has almost run out of options to get the economy going.

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Let’s go back to the basics of the economy. It takes a while when money gets printed before it really gets circulated in the system. In normal economic times, it takes like 24 to 36 months before a newly printed $100 bill is really brought into circulation, and you can see the trickle down effects of that.
The problem in the current economic situation is the fact that the velocity of money is much slower than it used to be. Due to the lower velocity of the money, it takes much longer before you feel the trickle down effects. So instead of the 24 to 36 months, it’ll take, I’ll say 60-72 months before we see any of the trickle down effects into the real economy.
We’re closing in on the 6-7 year period right after the first round of quantitative easing started in the U.S. so I do expect to see some sort of inflation increase in the near future, and the problem is once the velocity of money goes up again, then you might, indeed, have some sort of snowball rolling off the slope of a hill, and it will be completely uncontrollable.

Lepouttre notes that both Russia and China see the writing on the wall, and that’s why they’ve resorted to off-loading billions in U.S.-dollar based assets over the last year. To mitigate the inevitable collapse of the U.S. dollar they have been heavily acquiring one particular asset:

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Even though the Federal Reserve and the mainstream media are trying to downplay the real value of gold, it still has its monetary value.
It’s had so in the past two, three four thousand years, and it will continue to have it, because even Russia, even China, which have their own economic problems right now… they’re still buying gold.
Russia has been hit incredibly hard by the low oil price… and instead of trying to protect their own balance sheet of the Russian central bank by keeping their dollars, they are getting into the economy in U.S. dollars and buying gold with it.
So it really says a lot when a large economy like Russia, which isn’t a small economy at all, values having physical gold more than U.S. dollars for the balance sheet of the central bank.

The message could not be any clearer. To survive what’s coming investors need to be looking at diversifying their portfolios with resource-based hard assets that will retain their value when Western monetary systems buckle.

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