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Debt Ceiling Freeze: Investors Knew It Was Fake

Written by Gary North on October 21, 2013

The best indicator of concern over the threatened refusal of the House of Representatives to refuse to raise the debt ceiling was the Treasury bill interest rate.

We can see what happened in the days preceding the collapse of resistance. The rate for 3-month T-bills peaked at 14 one-hundredths of of a percent. This is from the Treasury Department’s website.

T-billrates

As you can see, the rate has fallen to four-tenths of a percent.

Investors did not take seriously the threat. There was some minimal hedging, but not much. Investors would have demanded a hundred times a tenth of a percent if they had really believed that the government would actually default even for a short period.

Treasury bond rates did not move. The investors did not expect a default.

t-bondrates

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One thought on “Debt Ceiling Freeze: Investors Knew It Was Fake

  1. They had the inside information from the Administration and the RINOS like McCain.they knew their money was safe. This is all an illusion from the Politicians and banks to defraud the American working People. Like giving a 625 Million dollar contract to a supporter and financier for a Computer Program that does not work now and never will work. And we will spend more millions to get a real programmer to attempt fixing it. Nothing coming out of Washington D. C but Fraud, bribery, racketeering and treason. While the Politicians worry about a real problem the Name of the Washington Redskins. Makes me Barf.