Exclusive:Treasury secretly weighs options to avert default

[cal04]

Source: Reuters

A small team of Treasury officials is discussing options to stave off default if Congress fails to raise the debt limit by the August 2 deadline, sources familiar with the matter said on Wednesday.

Senior officials, including Treasury Secretary Timothy Geithner, have repeatedly said there are no contingency plans if lawmakers do not give the government the authority to borrow more money.

But behind the scenes, top Treasury officials have been exploring ways to prevent a financial meltdown that would be triggered if the government was unable to pay its bills on time, sources told Reuters.

Treasury has studied the following issues:

Read more: http://www.reuters.com/article/2011/07/07/us-usa-debt-exclusive-idUSTRE7660GE20110707?feedType=RSS&feedName=politicsNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Reuters%2FPoliticsNews+%28News+%2F+US+%2F+Politics+News%29

[bluestateguy]

1. Fire sale of all the gold in Fort Knox

That should buy at least a month of time.

[juajen]

3. I don't believe there's any gold left in Ft. Knox. How could that be left

when they are allowed to even rob Social Security. Somebody made somebody a deal. I don't think our currency is backed by gold any more. I say that there is no gold left in Ft. Knox. They've probably put yarn from China in its place.

[Drale]

4. FDR took us off the gold standard on June 5, 1933

On June 5, 1933, the United States went off the gold standard, a monetary system in which currency is backed by gold, when Congress enacted a joint resolution nullifying the right of creditors to demand payment in gold. The United States had been on a gold standard since 1879, except for an embargo on gold exports during World War I, but bank failures during the Great Depression of the 1930s frightened the public into hoarding gold, making the policy untenable.

Soon after taking office in March 1933, Roosevelt declared a nationwide bank moratorium in order to prevent a run on the banks by consumers lacking confidence in the economy. He also forbade banks to pay out gold or to export it. According to Keynesian economic theory, one of the best ways to fight off an economic downturn is to inflate the money supply. And increasing the amount of gold held by the Federal Reserve would in turn increase its power to inflate the money supply. Facing similar pressures, Britain had dropped the gold standard in 1931, and Roosevelt had taken note.

http://www.history.com/this-day-in-history/fdr-takes-united-states-off-gold-standard

[roomfullofmirrors]

9. Nixon gets the credit for that actually.

France and Switzerland were redeeming US dollars for gold as late as 1971 when Nixon stepped in and closed the gold window and forever changed the global monetary system and preserved our nation's gold reserves. Google "Nixon Shock".

[Tunkamerica]

6. You don't think our currency is backed by gold?

Our gold isn't even backed by gold. If everyone who owned "gold" tried to cash in and get their nugget... well, let's just say a good deal of them would be disappointed.

[roguevalley]

8. actually, they are going to line up everyone in the bible belt and

tear out their gold teeth. I heard it on the teevee

[Tunkamerica]

10. Speaking as someone from the bible belt... I can't remember the last time

I saw someone with a gold tooth. I did see somebody on tv with one, but she was from somewhere else.

[roguevalley]

11. I remember a grandma. :)

rv, living in an extension of the bible belt in alaska

[Demeter]

2. Jail them

Put Congress in jail for violating their oaths of office.

Then shut down the Zombie Banks and tax the hedge fund managers.

[MilesColtrane]

5. Hold a bake sale?

Auction off dates with the "Hot Bachelors of the Farm Credit Administration"?

Collect and recycle all of of Bush's old empties that have been lying around the White House?

Have Peace Corps volunteers get second jobs as repo agents?

Put a used tee shirt from White House press secretary Jay Carney up for sale on Ebay?

[girl gone mad]

7. They should talk to Ron Paul..

who, oddly enough, has an easy, viable solution.

http://www.nakedcapitalism.com/2011/07/ron-paul-suggests-using-fed-to-end-run-debt-ceiling-impasse.html