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Treasury Prepares To Plunder Another $45 Billion From Retirement Funds As It Issues $110 Billion More Debt Next Week

Posted By admin On May 20, 2011 @ 4:01 am In Money Watch | Comments Disabled

Tyler Durden
Zero Hedge [1]
May 20, 2011

Now that it has finally been made clear that in order to accommodate the debt ceiling by adding marketable debt, the Treasury has no choice but to literally plunder retirement accounts [2], we now know that in order to fit in the just announced $110 billion in new bond issuance over the next week, Tim Geithner will have to reduce US retirement funding (the bulk of which, the Social Security Trust Fund [3]already lost $1.1 trillion in the past year) by at least $45 billion. That is the net result of $60 billion in net new cash and $15 billion in bill paydowns which will settle between May 19 and May 31. What remains to be seen is just how much cash the Treasury will bleed as it seeks a parallel track of under-rolling maturing Bills, in order to keep its previously disclosed intentions of issuing just $142 billion [4]between April and June. Keep in mind almost two thirds of this period has passed, which means that somehow the Treasury has to not only stop but in fact reverse its net issuance. We are not sure how this will actually happen.

Net cash in/out flow over the next two weeks:

Treasury Prepares To Plunder Another $45 Billion From Retirement Funds As It Issues $110 Billion More Debt Next Week  UST%205.19 0

Next week’s upcoming auctions:

  • $35 billion in 2 Years: Link [5]
  • $35 billion in 5 Year: Link [6]
  • $29 billion in 7 Year: Link [7]
  • $11 billion in TIPS: Link [8]

And as a reminder this is what the Treasury’s latest Sources and Uses table looks like:

Treasury Prepares To Plunder Another $45 Billion From Retirement Funds As It Issues $110 Billion More Debt Next Week  Borrowing%20Needs 0 [4]

Stock up with Fresh Food that lasts with eFoodsDirect (AD) [9]

Treasury Prepares To Plunder Another $45 Billion From Retirement Funds As It Issues $110 Billion More Debt Next Week  260310banner2 [10]


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URLs in this post:

[1] Zero Hedge: http://www.zerohedge.com/article/treausry-prepares-plunder-another-45-billion-retirement-funds-it-issues-110-billion-more-deb

[2] literally plunder retirement accounts: http://www.zerohedge.com/article/its-official-dts-discloses-total-debt-hit-ceiling-yesterday-government-draws-143-billion-ret

[3] Social Security Trust Fund : http://www.zerohedge.com/article/ss-trust-fund-we-lost-11-trillion-last-year

[4] $142 billion : http://www.zerohedge.com/sites/default/files/images/user5/imageroot/bernanke/Borrowing%20Needs.jpg

[5] Link: http://www.treasurydirect.gov/instit/annceresult/press/preanre/2011/A_20110519_3.pdf

[6] Link: http://www.treasurydirect.gov/instit/annceresult/press/preanre/2011/A_20110519_2.pdf

[7] Link: http://www.treasurydirect.gov/instit/annceresult/press/preanre/2011/A_20110519_4.pdf

[8] Link: http://www.treasurydirect.gov/instit/annceresult/press/preanre/2011/A_20110512_3.pdf

[9] Stock up with Fresh Food that lasts with eFoodsDirect (AD): http://www.efoodsdirect.com/

[10] Image: http://purewaterfreedom.com/

[11] Instead of Funding Retirement Accounts As Mandatory, Treasury Proceeds To Plunder The Most Since Debt Ceiling Breach: http://www.prisonplanet.com/instead-of-funding-retirement-accounts-as-mandatory-treasury-proceeds-to-plunder-the-most-since-debt-ceiling-breach.html

[12] Treasury Continues To Dip Into Retirement Accounts, Prepares To “Take Out” $66 Billion Chunk To Make Room For New Bond Issuance: http://www.prisonplanet.com/treasury-continues-to-dip-into-retirement-accounts-prepares-to-take-out-66-billion-chunk-to-make-room-for-new-bond-issuance.html

[13] Retirement Fund Plunder Update: $206 Billion So Far, $62 Billion Left: http://www.prisonplanet.com/retirement-fund-plunder-update-206-billion-so-far-62-billion-left.html

[14] Treasury to Auction $104 Billion In Debt Next Week, a Record: http://www.prisonplanet.com/treasury-to-auction-104-billion-in-debt-next-week-a-record.html

[15] Total US Debt Hits $14.195 Trillion, $99 Billion Away From Debt Ceiling; Treasury Revises Breach Date To As Soon As April 15: http://www.prisonplanet.com/total-us-debt-hits-14-195-trillion-99-billion-away-from-debt-ceiling-treasury-revises-breach-date-to-as-soon-as-april-15.html

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