The U.S. Debt Ceiling debate continues (part 2)

The U.S. Debt Ceiling debate continues (part 2)

The debt ceiling debate is starting to become increasingly worrying. The debt ceiling can have far-reaching implications for the global economy. With each passing day, the probability of a violation rise, as well as the potential economic damage it can bring.

Please read the previous article about the debt ceiling before you continue
The U.S. Debt Ceiling & USDJPY opportunity
This time we are left to focus on 1Q2023 US GDP & core PCE inflation figures and the debt ceiling debates (again). Also, the Federal Reserve is entering a blackout period ahead of the anticipated rate meeting on May 3rd, 2023. A blackout period for the Federal Reserve is a time

If the debt ceiling debate leads to violation, then the economic consequences will be dire.

Stephen Junuea's new estimate for deficit FY23 (Fiscal Year 2023) is 1.35 trillion. That increases the probability of a debt ceiling violation over time.

The deficit is 5.1% of GDP. Because of this, the estimated date when the US Treasury Department will run out of funds has been moved up to early August, but it could even happen in July. They will no longer be able to pay for most of their normal daily expenditures.

This estimated x-date (estimated date when the US Treasury Department will run out of funds) is important to watch as the Treasury Department will be forced to balance the budget on a day-by-day basis when the x-date is reached.

When this happens, it will send shockwaves through the financial system. Out of this, more than 40% of traditional outlays would have to be suspended.

Traditional outlays refer to the money the US government spends on different programs such as Social Security, Medicare, Medicaid, defense, and welfare.

I'm keeping the newsletter short for the day. I had to go to the dentist today early, so I couldn't start writing early in the morning  
Use the play button to listen to this article instead

US Debt Ceiling and its Potential Consequences

Another concern is the risk of a miscalculation. The x-date is unpredictable. Treasury Secretary Yellen will likely argue for an earlier date, which can lead to doubt among negotiators.

She will likely argue for an earlier date because that gives her more flexibility and certainty in managing the Treasury's cash flow and operations.

The game of chicken has been playing out for weeks. Again, the debt ceiling limits how much the government can borrow. The debt limits concerns have been used for political debates for decades.

It's important to understand the background issue. Every year, the government spends more money than they earn. The government must borrow from. At a certain point, the government has a debt higher than the limit set by Congress (known as the debt ceiling)

Since the Budget Control Act of 2011, Congress must agree to raise the debt ceiling. If Congress does not, the US won't be able to meet its financial obligations and could potentially default on its debt.

In the past few weeks, Congress has been unable to agree on an increase in the debt ceiling, which can lead to the possibility of the US defaulting on its debt if they don't agree.

If the debt ceiling is violated, the central banks may need to freeze the debt market, which would be a major blow to market confidence, risk assets in the financial markets, and credit worthiness of the United States would also face a downgrade. As a result, it will be more expensive for the US to borrow in the future.

Finally, a long-lasting freeze in the debt ceiling could trigger a worse recession or depression since World War 2.

Discord invite

Are you already a premium member? Here's the invite link and instructions to join Discord
Discord invite for members
Access to Discord for Premium members

Apex Dex by ByBit

Reminder Apex incentive program, which pays you to trade and keep tour trade open, is ongoing.

Trading rewards 
If you need a referral link:
My referral code is: 46

In my opinion, this is the best DEX for trading Bitcoin, Ethereum and other altcoin futures.

They also have a mobile app, Android:

ApeX Pro: Trade Crypto - Apps on Google Play
Permissionless Derivatives DEX

Also, an app for iPhone

‎ApeX Pro: Trade Crypto
‎About Us ApeX Pro is a decentralized, non-custodial DEX trading exchange and app focused on realizing the Web3 vision. ApeX Pro enables users to access multi-chain permissionless cross-margined perpetual contracts to its metacommunity. It is primed to deliver limitless access to the perpetual swap…
Ref code = 46

Other altcoin perpetual contracts you can trade

You can also stake your Apex tokens

After less than 24 hours of staking, it still earned 324 APEX tokens, which is currently $93

ByBit Deposit blast-off up to $30k

Sign up to Bybit with my referral link:

Become an affiliate of this newsletter.

Receive 50% of the recurring commission every month

You get a revenue split, which seems fair to me, as compensation for promoting/sharing the newsletter with others.

Payouts can be in crypto or through a bank.

Newsletter affiliate 

Receive 50% of the recurring commission every month

Basically, you get a revenue split, which seems fair to me as compensation for promoting/sharing the newsletter with others.

Sign up