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Some funds are restricted to buying United States Treasury obligations.
Can you imagine what would happen to American banks if the U.S. government stopped paying its treasury obligations?
2. The global role of the dollar, which underpins continued demand for U.S. dollar assets, including U.S. Treasury obligations.
The underlying Canadian argument, of course, is that its debt is just as safe as United States Treasury obligations (see the paragraph at the top of Page 4).
Republicans demonstrated this in last summer's debt ceiling fight, deploying the threat of a default on Treasury obligations to force spending cuts.
Despite the extreme assertions — or wishful thinking — from apocalyptic commentators, reports of the death of United States Treasury obligations have been greatly exaggerated.
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Whether through Federal Reserve credits--effectively the creation of new money--or the utilization of tax receipts flowing into the Treasury, the approximately $15 billion per month of interest on outstanding Treasury obligations--a relative pittance--would be prioritized over other uses of funds, as both common sense and the 14th Amendment would dictate.
In 2010 the DOD obligated $366 billion to contracts (54percentt of the total DOD obligations), an amount seven times the United Kingdom's entire defense budget.
The Tea Party and its friends do not control the majority of the Congress, nor could anyone expect House majority leader John Boehner to defy the Chamber of Commerce, the Business Roundtable, and the rest of America's most powerful business lobbies after they made it clear they would not stomach even a temporary, technical default on US Treasury obligations.
Financial obligations mounted abroad, while political paralysis deepened at home.
Even China, the regime's strongest backer, had expressed concern about the violation of UN obligations.
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