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Thread: Fed said to have emergency plan to intervene "if" US defaults

  1. #1

    Fed said to have emergency plan to intervene "if" US defaults


    Fed said to have emergency plan to intervene if (WHEN) U.S. defaulted on debt


    The Federal Reserve drew up extensive plans for handling a U.S. debt default that included scheduling deferred payments and lending cash to investors, according to a lawmaker who cited Fed documents.

    America courted disaster in 2011 and 2013 when political fights over the national debt nearly left the federal government unable to pay its bills.

    Analysts and officials warned that missing payments could lead to economic calamity, and details have only slowly emerged over how financial officials braced for the unthinkable.

    In a June 2014 letter to Treasury Secretary Jack Lew seen by Reuters on Monday, Republican Representative Jeb Hensarling of Texas said his staff had reviewed the Fed's unclassified plans for how to handle a default. (http://bit.ly/1GZDmKo)

    The plans included scheduling new payment dates for defaulted securities, Hensarling said in the letter which was also signed by Republican Representative Patrick McHenry of North Carolina.

    The New York Fed, which carries out the will of the Fed in financial markets, would also conduct "business as usual" with regard to accepting Treasury securities as collateral, according to the letter.

    The New York Fed declined to comment.

    The plans continue to be relevant to investors because debt ceiling debates have become a perennial danger from Washington.

    The Treasury is currently scraping up against an $18.1 trillion borrowing cap, and the Congressional Budget Office estimates the government could struggle to pay bills by October or November if Congress and the White House do not agree to lift the cap.

    Debt defaults in other countries have triggered financial crises.

    http://mobile.reuters.com/article/id...50511?irpc=932

  2. #2
    Nonsense .. EVERYTHING IS AWESOME!!!

    (says the bot)


  3. #3
    Team Owner
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    No worries, everything is awesome, vox and the bot say so.

    Thanks Obama

  4. #4
    If there's a default it's because the gop Congress can't govern. Not because we can't pay our bills.

  5. #5
    Quote Originally Posted by bitonti View Post
    If there's a default it's because the gop Congress can't govern. Not because we can't pay our bills.

    LMAO at how stupid you are. YOu are an ignoramus bar none.

    70% of the budget is MANDATORY SPENDING.

  6. #6
    Quote Originally Posted by Frequent Flyer View Post
    LMAO at how stupid you are. YOu are an ignoramus bar none.

    70% of the budget is MANDATORY SPENDING.
    the gov't can print it's own money therefore it can never actually default on it's debt

    unless the congress doesn't allow that to happen

  7. #7
    Assistant Coach
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    They print it and then buy their own Treasury Bills, mainly because no one else will touch them!

  8. #8
    Team Owner
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    Just another low information uneducated brainwashed liberal dope.

  9. #9
    Quote Originally Posted by pope View Post
    Just another low information uneducated brainwashed liberal dope.

  10. #10
    Quote Originally Posted by MnJetFan View Post
    They print it and then buy their own Treasury Bills, mainly because no one else will touch them!
    US bonds are the most popular debt in the entire world.

    Everyone buys them. They sell like hot cakes.

    It's a super safe place to put your money. In part because we've never defaulted.

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