Welcome back to channel everyone today, i want to talk about the u.s debt ceiling not being raised the special measures that are going to have to be implemented and how this could cause forced liquidations and the amc squeeze. Trust me guys. You do not want to miss this video, so stay tuned and let's make some money, but guys before i dive into the video. I just want to give a massive shout out to the 3 000 of you that are currently ding, that notification bell, because you guys are always the first to watch a new video as soon as it's released so guys be sure to drop a like down below Subscribe to the channel and ding that notification bell, if you haven't already so that you don't miss another video, just like this one and now i want to dive straight in with the key information.

So on friday the treasury will suspend sales of securities. The debt ceiling did not get raised by congress; it will be reinstated tomorrow. No more can kicking for the hedges. So what does that really mean and what exactly happened here? Well, in 2019, the u.s debt ceiling was suspended as a result of the pandemic and that suspension ends today saturday, the 31st of july, where you can see here from wikipedia that that u.s debt ceiling was raised in the 80s, the 90s, the naughties the 2010s and In 2019, hit an all-time high of 22 trillion dollars and was then suspended until the 31st of july 2021..

If we have a look at the world debt clocks, we can see that the us currently has 28 trillion dollars of debt which blasted, through that ceiling of 22 trillion dollars the other week, janet yellen urged congress to raise or suspend the debt limit again by august. The second treasury secretary jeanette yellen, warned congress that her department will need to start extraordinary measures on august, the 2nd. If lawmakers don't raise the debt ceiling on friday, there was no congressional action and therefore the focus will turn to september after lawmakers returned from their six-week august recess. Basically, on friday, congress decided to not raise or suspend that debt limit and have subsequently taken a six-week recess.

Therefore, janette yellen is going to have to start dipping into her toolkit of extraordinary measures until they return in six weeks time, because that debt ceiling has been exceeded. The treasury department is set to start dipping into its toolkit to avoid breaching the us debt limit, as congress still lacks a clear plan for averting default later this year. At noon. On friday in washington, the treasury will use the first of its so-called extraordinary measures.

Suspending sales of securities that help states and municipalities invest bond proceeds. If congress don't raise or suspend the limit again, treasury will be forced to take more special measures to prevent the fall after monday. Treasury has several additional options to avoid a default treasury can suspend new investments in several government funds, including for civil service retirement and disability, postal service, retiree, health benefits exchange stabilization and the government securities investment fund. Basically, what that means is they can employ extraordinary cash flow management measures such as suspending contributions to government, employee pension funds, and, if they don't do that, an unprecedented default on u.s government debt obligations would precipitate a financial crisis.

It would threaten the jobs and savings of americans at a time when we're still recovering from the pandemic. On top of that, the timing for any extension or suspension is very uncertain. It's uncertain how or when democrats will act, house ways and means. Committee chairman richard neal, said the house will leave for august recess without acting on the debt ceiling and house budget committee.

Chairman john yarmuth said: there's no concrete plan on whether to approach the debt ceiling throughout budget reconciliation. Meanwhile, treasury's cash balance was sat 537 billion dollars. As of july 28th. The department has said that will decline to 450 billion by july 31st.

That's a fall of around 87 billion dollars in three days, meaning the treasury department will be all out of cash in around 18 days, which is way before the committee comes back from their august recess in about six weeks now you might say well, why is that Important well, the fed said firms parked 1.04 trillion dollars overnight at the reverse repo facility on friday. That's the first time that overnight repo facility has ever hit one trillion dollars and that's likely to continue. There were 86 bidders, including money market funds and other eligible financial institutions. Also, a failure to raise the debt ceiling would be more catastrophic than a layman collapse.

S p says in fact one economist said. This scenario would be worse than the lowest point of the financial crisis, guys just a quick one before we go any deeper. If you haven't already i'd, really consider joining the patreon and becoming part of the team. That way, you can discuss amc and other stocks talking about due diligence, news articles and just generally other updates before i even make a video linked in the description below failure to raise the debt limit would likely be more catastrophic to the economy than the 2008 failure Of lehman brothers and would erase many of the gains of the subsequent recovery, a disruption in government spending means no government paychecks to spend at the mall lost business and revenue to private contractors lost sales of retail shops, particularly those that circle now close national parks and Less tax revenue for uncle sam, all of that could cascade through to the stock market.

That's seen a wave of volatility lately amid increasing expectations for a pullback. Therefore, if that debt ceiling doesn't get raised or suspended and the government paychecks are halted, it could potentially cause a market-wide crash. That's why all of these recent proposals have been made to avoid over-leveraged shorts, doing too much damage to the economy. On top of that, i think it's also very important to mention this committee passes legislation to advance investor protections, so the committee has actually already passed hr 4617 hr 461a and hr 4619..

Now the gov track hasn't quite updated, but it's been considered by the house committee and it's past the committee. The bill then needs to go to the house then to the senate and then get signed by the president and put into law. So we aren't quite there. Yet, but we're definitely on the way it seems like the sec and the dtcc are trying to prevent a wider market crash, but are trying to crack down on those over leveraged shorts and, finally, something i thought was very very interesting.

Is that amc released a statement saying note that at this time to comply with u.s securities laws and on the advice of council? Unfortunately, we are unable to answer any questions pertaining to the trading and price volatility of our securities, including, but not limited to the short selling of shares or derivatives on amc stock. Therefore, the sec are clearly investigating the short selling of amc and therefore, amc can't comment on it any further. Hopefully we get some good news announced soon guys be sure to. Let me know what you think down in the comments below about the debt ceiling not being raised and about these new bills.

Passing the committee and if you want to pick up some shares in amc, but you haven't even yet signed up to a trading platform. Be sure to sign up with fidelity because they don't sell your orders to market makers like citadel, who put them through the dark pool, basically don't buy amc with weibull or robin hood or other trading platforms that do sell your order flow. Although saying that weevil is an excellent beginner, investing service, they've got great charts, they've got news, they've got option order, flow, they've, got company fundamentals and figures. They've got absolutely everything.

So if you do want to buy some other stocks, that aren't amc like apple, amazon, netflix or tesla, then be sure to check out the link down in the description below to get some free shares or, if you're from the uk be sure to sign up with Free trade again linked in the description below because they also don't sell your order flow as it's illegal in the uk and as always guys, if you enjoyed this video, be sure to check out some of my others. Alternatively, subscribe to the channel and ding that notification bell, because that way, you'll be alerted when i upload a new video cheers.