A tsunami of reserve currency debt issuance, coming soon to an economy near you.
MarketWatch
Treasury expects to borrow record $550 billion
By Rex Nutting
3:00 p.m. EST Nov. 3, 2008
WASHINGTON -- The U.S. government is expected to borrow a record $550 billion in the current quarter, including $260 billion in special funding for the Federal Reserve's extraordinary liquidity programs, the Treasury Department said Monday.
The borrowing estimate is $408 billion more than estimated three months ago. For the first three months of 2009, the government is expected to borrow $368 billion, the government said.
In the three months ending September, the government borrowed $530 billion. The Treasury will announce on Wednesday the sizes and terms of its quarterly refunding auction.
AP
$900 billion in gov't borrowing seen through March
Goverment, raising cash for rescue, projects borrowing of more than $900 billion through March
November 03, 2008: 6:23 PM EST
NEW YORK (Associated Press) - The government, raising cash to pay for the array of financial rescue packages, said Monday it plans to borrow $550 billion in the last three months of this year --- and that's just a down payment.
Treasury Department officials also projected the government would need to borrow $368 billion more in the first three months of 2009, meaning the next president will confront an ocean of red ink.
The nonpartisan Committee for a Responsible Budget estimates all the government economic and rescue initiatives, starting with the $168 billion in stimulus checks issued earlier this year, total even more -- an eye-popping $2.6 trillion.
One day before voters set out to elect the 44th president, new economic reports brought more bad news...
In addition to the borrowing numbers, Treasury released estimates by major Wall Street bond firms projecting that total borrowing for this budget year, which began Oct. 1, will total $1.4 trillion, nearly double the previous record.
Major Wall Street firms were equally pessimistic about the size of the federal deficit this year. They projected it will hit $988 billion for the current budget year, more than twice the record. In July, the administration projected a deficit for this year of $482 billion, but that was before the financial crisis erupted in September.
Supporters of the government rescue packages argue that the ultimate cost to taxpayers should end up being a lot smaller, partly because the Federal Reserve is extending loans to banks that should be paid back.
And in the case of the $700 billion rescue package, the government is buying assets - either bank stock or distressed mortgage-backed assets _ that it hopes will rebound in value once the crisis has passed.
But the government still needs to borrow massive amounts to buy the assets, an effort that has driven up borrowing costs to levels never before contemplated....
