Is the rise in Bitcoin and gold price foreshadowing further debasement?

Definition

• The Treasury General Account (TGA) is held by the U.S. Department of the Treasury at the Federal Reserve Bank. It is used to manage the government’s cash flow and spending activities.
• It receives various deposits, including tax collections, and makes payments for federal spending—an important indicator of meeting financial obligations.

Quick Take

• The TGA is dropping like a stone; it had dropped $50 billion this week while dropping $130 billion this month.
• The data on Fred is a weekly average which currently reports $109 billion left; however, daily statements report only $87 billion left in the account.
• New tax receipts aren’t outperforming the runoff created by Secretary Yellen and Congress who continue to spend.
• What does this mean? The government will be out of money shortly in a matter of weeks. The FDIC won’t be able to insure deposits, and we could be facing a shutdown of the government.
• We would expect further discussion about raising the debt ceiling, which involves printing more money and further debasing the currency.
• Are Gold and Bitcoin smelling out this debasement that could occur in the short term? As Bitcoin is up 10% this week and gold continues to make new highs.

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