Is the USA going to default? What will happen if it does?
I think the world is waiting and watching to see exactly how things are going to go, I hear that if the US does default it will impact the global economy, thus it will effect most everyone somehow.
I cannot get my mind around exactly how far reaching this could be, the exact nature this is likely to take and thought I might get a few different ideas here
It's already having an affect on the global markets and economy - they have to see that they need to come together to make a decision for the common good of the US and the rest of us!
As usually happens in these financial crises, at the last minute a sticking plaster 'solution' is applied, as it will be this time, to push the crisis a little bit down the road and ideally into someone else's watch. And when it comes around again, it's always bigger and badder.
More likely than a default is a downgrading of the AAA status which could trigger all sorts of nasties. Higher interest rates are just a start. Some of the currencies that are pegged to the dollar (i.e. fixed dollar exchange rate) might unpeg and float up, rather than be dragged down. Then what's your oil going to cost?
I saw on the news that some kind of a deal was about to be agreed so that the debt ceiling can be raised. 'A sticking plaster', as Paraglider says, but can a sticking plaster staunch a major artery once it's severed? Assuming that the triple A rating is already history, we must just sit and wait to see what follows.
Sticking a plaster on just to keep things from collapsing right away could work if people actually use the time the plaster buys to actually do something to reduce the debt.
I seem to recall that back during Clintons presidency the nation actually managed to hit 0 national debt, that the country was out of the red. If my memory is correct it does mean that the debt can be cleared......
The US defaults already. In case you haven't noticed:
The US simply defaults in a most underhanded way - by printing money.
The money supply has shot up drastically in the past ten or so years, and it will have a terrible consequence.
The US are unfortunately not the only ones who print money that has nothing to actually back it in terms of worth. Suppose its got value as kindling??? LOL
Here in the UK they have done similar, printing new money. What I find odd is that when criminals do it, they are hurting the economy by de-valuing the currency but when it's done officially the damage somehow magically ceases to exist? (supposedly a huge number of £ coins in the country are fake, that technically most everyone winds up paying with counterfeit currency and are thus breaking the law with all the risks that carries....)
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