A quick "fun fact" to kick off this week's Kingsmill's Investment Miscellanea. In honour of the Victoria Day long weekend ahead (which celebrates the birthday of Queen Victoria), did you know that this holiday holds the distinction of being the oldest Civic Holiday in Canada? It even predates the Confederation by decades, dating back to 1845.

Now, with that brief history lesson out of the way, I will keep it short and sweet for this week's discussion.

We are often asked about the current "U.S. Debt Ceiling Crisis." Frankly, it's a crisis that is largely manufactured. However, regardless of the party in power, it seems to repeat itself over and over again.

For some background, Congress raised the federal debt limit by $2.5 trillion to $31.4 trillion in December 2021, and this self-imposed "debt ceiling" was reached in mid-January 2023. The concept of a debt ceiling has been around in the U.S. for over a century. Similar to past debt-ceiling episodes, the most likely way out of the current deadlock is for Congress to pass a bill that raises the debt ceiling. Since its establishment in 1917, the debt limit has been raised or suspended over 100 times. While the decision to increase the debt limit has historically been routine, the increasingly polarized political climate in recent years has turned it into a theater of brinkmanship.

Perhaps this time it will be different, and we really won't raise it anymore. But promises like that seem hard to believe. Ultimately, from an investment perspective, it is likely to be a non-event once again. Since 1985, the Treasury has been forced to resort to extraordinary measures 11 times, and each time Congress has acted to forestall default, often at the last minute after considerable high-stakes wrangling. The possibility that the Treasury could run out of money may cause some short-term volatility in financial markets and the flurry of fear-inducing news stories that often accompany choppy markets.