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RVAspeculator (30.06)

11 trillion and counting.

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March 17, 2009 – Comments (12) | RELATED TICKERS: GPS

Remember a few months ago when the national debt broke 10 trillion and it was a big deal.  Well, they took down the debt clock that ran out of digits and are working on a new one that can count to a Quadrillion.  Seeing the “Quadrillion” figure in print made me think of my blog post from October:

(“Another few billion for Citi and a handy guide for readers….)
http://caps.fool.com/Blogs/ViewPost.aspx?bpid=112881&t=01001808419327792238

Here I taught caps readers what comes after a trillion all the way to duotrigintillion (10^99).   Now this knowledge is coming in handy!

This Quadrillion clock is supposed to be up and running in New York before the summer of this year.   They better hurry up because we are passing 11 trillion today..   CAPS readers know this figure is assuming that the 9.7 trillion we have gave out, guaranteed or “loaned” will all come back to the government somehow even though it is being poured into black derivative holes such as AIG.

Oh, and don’t even think about things such as Medicare, Medicaid and Social Security. (Unfunded Obligations).  The present value of these deficits or unfunded obligations is an estimated $41 trillion.
So like most government figures, 11 trillion debt is meaningless, but another milestone in the “debt we admit to having”.
http://www.brillig.com/debt_clock/

Happy 11 trillion day CAPS!   Post your guess on what day we hit 12 trillion.

If you are REALLY bold, post your guess on when the Quadrillion clock needs to be replaced with a Quintillion clock.

If you are REALLY, REALLY bold, post how the U.S. is going to pay any of this off without outright printing.

PS:   On a related note, I just closed all my gold underperforms I had put on at the absolute peak on 2/23 when GDX was above $37.   Sorry gold bears, that short decline from overbought is all you get in my opinion.

12 Comments – Post Your Own

#1) On March 17, 2009 at 4:33 PM, MikeMark (29.52) wrote:

Assuming true inflation (not the useless CPI) at a rate of 15% yearly the quadrillion clock will have to be replaced between 20 and 35 years from today. Twenty years if we recognize Medicare, Medicaid and Social Security debt, 35 if we don't. It could occur earlier given the need for more monetization of debt (printing more money and giving it to the treasury) by the government. Interestingly I think the US dollar will collapse long before that occurs if they don't change their ways. Not that I want it to, just that I believe it will.

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#2) On March 17, 2009 at 4:34 PM, outoffocus (23.25) wrote:

First, I dont think the US debt will make it to a Quadrillion in the near future.  Like many of the other bubbles in recent history, this too shall pass. (Remember the Dow 15000 prediction?) However I do see the US debt surpassing 12 trillion before the year is out.  Just like bubbles that preceded it, the momentum will accelerate exponentually before it pops.

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#3) On March 17, 2009 at 4:58 PM, RVAspeculator (30.06) wrote:

MikeMark:  I was thinking 20+ years myself, but Exponential Functions are tricky buggers.

OutofFocus:   Is 20 years the near future?  What in your opinion pops this “bubble”?   The problem with this one is its not oil or stocks that rely on greed and more suckers bidding it up for it to increase, it actually increases exponentially because interest servicing costs expand in proportion to the debt expansion.   If you believe “momentum will accelerate exponentially before it pops” then what is the event that pops it?  

I agree with you that it is unsustainable but believe the only thing that can stop it now is a debt default or making the amount of money owed worth much less….    Or getting ridiculously responsible right now, which is the most unlikely scenario of all it seems.

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#4) On March 17, 2009 at 6:55 PM, RVAspeculator (30.06) wrote:

I just had a friend ask me why the GPS ticker on this post.

It is because GPS (Gap) owns Banana Republic.

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#5) On March 17, 2009 at 7:11 PM, whereaminow (24.34) wrote:

As socialist economist Abba Lerner once remarked, "we owe it to ourselves."

Of course, neither he nor Keynes ever specified exactly which groups they were referring to when they said "we" and "ourselves."

I suppose it's apparent now that "we" is the private sector and "ourselves" is the politically connected and the bankers.

Maybe torches are the answer after all. Who knows.

David in Qatar

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#6) On March 17, 2009 at 8:05 PM, Eudemonic (64.99) wrote:

The fed sure passed up a good chance to add to this when it didn't bailout LEH. Wonder what that would've cost...

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#7) On March 17, 2009 at 9:45 PM, RVAspeculator (30.06) wrote:

If they had bailed out LEH all the CDS that Goldman had would have been worthless.  

Paulson would not have let that happen.  :)

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#8) On March 17, 2009 at 11:09 PM, JGus (28.84) wrote:

Hey RVA,

Great post and a scary figure. I just wrote a post about the huge challenge that the US faces simply FINANCING all of the debt, never mind PAYING for it!

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#9) On March 18, 2009 at 7:06 PM, Eudemonic (64.99) wrote:

Speaking of a trillion, I just got an email from Robert Mugabe's trusted financial advisor who wants to park his megatrillions in my bank accont. Problem is, my bank account is already full of a trillion zeros. Anybody wanna lend this poor sap a hand?

 

 

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#10) On March 18, 2009 at 11:29 PM, RVAspeculator (30.06) wrote:

My timing on gold shares this years has been lucky/amazing.   Hedged at the top, pulled the hedges at the bottom two times already.  God have mercy on the gold bears.

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#11) On March 19, 2009 at 10:33 AM, StatsGeek (29.36) wrote:

RVA,

I love what you wrote in my blog comments:

 

It’s a philosophical question:  "I have a hole that is infinitely deep (but not quite).   I have an unlimited amount of dirt (truly unlimited).   Can I fill the hole?”

Also note:  My shovel is unlimited size and I have unlimited strength.

Can you do a new blog post focused on this?

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#12) On March 19, 2009 at 3:06 PM, RVAspeculator (30.06) wrote:

Thanks Stats....

I have written many posts opining how the deflationists have it wrong in the longer run.

My quote is “Deflationists believe there is a shortage of zeros”.  :)

I will make my next blog on the same topic, probably this weekend.   I think I will start it with that philosophical question I left on your blog, swing by and leave a comment.

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