The Treasury Re-Hypoptication: The Practice of Reusing Pledged Us Securities as Collateral for Additional Loans

A debt default could potentially trigger a constitutional crisis and last but at least number eight impact on credit rating the us could lose its triple a rating status leading to even higher borrowing costs in the future. The government can use the same exact asset as collateral multiple times and no one knows it or sees it this is kind of what happens to be enclosed so if this still doesn't make sense to you to go to a time in history where we can kind of see what caused the collapse in the market it's 2008. In 2008 re-hypopication came under increased scrutiny due to the risk it can pose to the financial markets as such there have been regulatory efforts to limit the extent of re-hyp