Paper money eventually returns to its intrinsic value – zero. (Voltaire, 1694-1778)Often rather quickly, I might add to that nugget of wisdom. Unbeknown to most people in this country - and certainly not reported in the mainstream media - is a Provision buried within the Continuing Appropriations Act of 2014 that - in effect - gives the President the ability to unilaterally waive the debt ceiling limit. Although Congress can override the President's move to lift the debt ceiling entirely, it would take a 2/3 majority in both Houses of Congress to block the action. That just would not be possible for all practical purposes.
It's amusing because when I first saw the news that a deal had been reached, I spent time scouring the internet to see if I could find out the new debt ceiling limit - i.e. how much more deficit spending could occur between now and February 7, the next drop-dead date. I could not find any numbers. Now I know why.
It looks to me, based on reading the Bill, that Harry Reid and Lisa Murkowski, who is on the Appropriations Committee, slipped the Provision into the legislation at a late stage in the game, when they realized that Boehner had caved in and the world was begging the Government to avoid default. I would bet a lot of money that probably 90% of the Congressmen who voted "yes" on the Bill didn't even know that the Provision was in there. I can guarantee that as fact.
In addition to this, there is no specified limitation on the amount of debt that can issued between now and Febraury 7th, when supposedly Congress reconvenes to vote on extending the debt ceiling limit. But now it appears as if February 7th is a meaningless date.
In essence, while most people feel a sense of relief over the passage of the Bill enabling to Government to pile on even more debt, the cold reality is that the legislation is a ticking time bomb for the U.S. dollar and it sets up the next stage of systemic collapse. I wrote an article for Seeking Alpha which lays out my analysis, which you can read here: LINK.
The truth is, the U.S. political and economic system is now akin to a runaway freight train in which the brakes have failed and it's headed toward a gorge where the bridge has collapsed.