7/31/2013 Daily US Cash Deficit

The US Cash Surplus for 7/31/2013 was $2.2B bringing the July 2013 deficit for the full month to $90B exceeding the July 2012 deficit of $82B by $8B.

07-31-2013 USDD

As expected, the last day of the month brought in strong revenues and strong outlays. $16B of revenues helped push yesterday’s meager 1% YOY gain all the way back up to 9%…respectable, but well under the pace set in the Jan-April period. Just for reference…YOY gains in revenue from Jan-April were about 15%…May through July, adjusting for the Fannie Mae payday loan is running at 9% YOY growth.

I’m pressed for time now, but will try to crank out a more in depth July review over the weekend. In the meantime…we get a first glance at August in just a few hours.

Fun With Math: 8/1/2013

Per the June Monthly Statement of Public Debt, of the $11.9T of public debt outstanding, about $1.568T of it is bills…that is 12 months or less, and about $1.320T of it is 30 year bonds. So the $ of bonds outstanding¬† are roughly about the same…just a $250B difference…. a rounding error really ūüôā

This is what I find amazing….the annual interest paid on the 30 year bonds is about $68B per year¬†according to¬†my calculations. Anybody wanna guess the annualized interest on the bills? A mere $1.5B….for an effective interest rate a little less than 0.1%. The weighted average rate on the 30 year bonds is about 5.12%….54X higher!!

That blows my mind…the annualized interest¬†paid on this $1.6T of debt is a mere $1.5B. Where do I sign up? Anybody think the Bugatti Dealership will float me a $2M interest only loan for a Veyron??

On the other side of the equation, bonds make up only 11% of the debt outstanding, but their $68B of annualized interest expense makes up a full 31% of the $220B of interest paid over the last 12 months.

It has never been clearer to me that the whole point of all the interest rate manipulation…QE 1,2,3,XX ect… has absolutely nothing to do with stimulating the economy, stimulating lending, the housing market, the jobs market¬†ect… No, the singular point of all that nonsense¬†is simply to keep the budget deficit from exploding. It’s hard to go technically bankrupt if you can borrow an infinite amount of money at effectively 0%. But when they lose control…and they will…it’s game over. Effective rates on the debt outstanding are under 2%….even a mild increase to 4% and boom….it’s over. Just imagine if one day the world woke up and realized that lending $11.9T unsecured debt to the morons that run our government (with an astounding 15% approval rating) at effectively 0% (after¬†inflation)¬†is a pretty stupid thing to do. Don’t get me wrong…I’m not holding my breath. 30 years of stupid isn’t going to fix itself overnight…but it will work itself out someday.

7/30/2013 Daily US Cash Deficit

The US  Cash Deficit for 7/30/2013 was $5.0B pushing the July 2013 deficit through 30 days back up to $93B with just one business day remaining.

07-30-2013 USDD

Recall…I aligned 2013 and 2012 by business days and day of week…So we are comparing 21 business days to 21 business days, but July 2013 has an extra day, so we are comparing All of July 2012 to 30 days of July. This is more or less what the month would have looked like without the extra business day….Flat revenues, and adjusted for timing, small, but noticeable reductions in outlays.

Yet…we do have an extra business day, so we can probably expect an additional $10-15B or both revenues and outlays. It still looks more likely than not revenues, even with the extra day will come in under 10%….August…which loses a business day could be downright ugly…