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Jonathan Liggett
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Jonathan Liggett, CFA, is a Partner and Portfolio Manager for JL Squared Group, LLC (JLS) in Philadelphia, PA. JLS is an investment advisorfounded in 2003 by Jonathan Lubert to provide manager selection, access, oversight and diversification to its institutional and high net worth clients. ... More
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JL Squared Group, LLC
  • Unconstitutional Debt Limits 0 comments
    May 23, 2011 3:49 PM | about stocks: ERO, DLBL, TLT, TBT
    An article in the American Prospect is getting some buzz amongst street economists today.  Jefferies referenced an article from the American Prospect citing Section 4 of the 14th Amendment.  Essentially it made it unconstitutional not to pay the debt of the US government.  The statue that created the debt ceiling was simply a political tactic which has never been fully tested in constitutional law. In addition, the Fed, as the banker of the US Treasury, may be under an obligation to pay US debt even if the US Treasury account is empty.

    Anyway, with the US Constitution on the side of bond holders, maybe there is a good reason to consider the US a AAA credit and the USD a sound asset.  I would rather hold US debt where ability and willingness to pay is there than an European debt obligation where neither is assured at this point.  

    See the article here:

    http://prospect.org/cs/articles?article=real_americans_hate_the_debt_ceiling

     



    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Themes: Macro, US Debt, Treasuries Stocks: ERO, DLBL, TLT, TBT
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