Treasury Acts to Avoid Default

With the U.S. credit rating being downgraded for the first time EVER last week, we have to be wondering...could the U.S. ever start defaulting on the payments of the $trillions in IOU's it has issued?

Yesterday in the Wall Street Journal we found this headline;

Treasury Will Act to Avoid Default

Treasury Department officials said Monday that they will begin to take extraordinary actions Friday to manage the government's finances so the U.S. won't default after hitting its borrowing limit on May 16.

The moves come amid divisions among congressional leaders over how to raise the $14.29 trillion debt limit and avoid a default that Treasury officials say could cause another financial crisis.

"Default by the United States on its obligations would have a catastrophic economic impact that would be felt by every American," Mr. Geithner wrote. At that point, he said, the government would stop or delay in such payments as military salaries, Social Security checks and tax refunds.

See it here; http://online.wsj.com/article/SB10001424052748703703304576299484177501192.html?mod=googlenews_wsj

Well...that sounds serious.  As we know Congress is debating whether or not to raise debt limit as we speak...and it appears the Treasury is getting ready for what they heck they can do if it isn't raised.

Also of interest is the date of May 16.  If the flotilla coming from Turkey shows up in Gaza and forces some type if incident on May 15 (as planned)...and the USA starts down some path of "catastrophic economic impact" all at the same time....it may prove interesting.

As the carnival worker always tells us, "Please stay seated with your seat belts fastened until the ride has come to a complete halt".