I don't think it makes any sense for them to default. They've been able to live beyond their means on debt for years and the plan has to be to keep doing it for as long as possible No?
Bingo
Quote:
Worse comes to worse they'll just have to progressively live a bit less beyond their means. But a default would be stupidity - It would require them to get their financial house in order and live within their means wouldn't it? And if so, I surely, surely, surely can't see them wanting that.
good call Herbs - i suspect the reserve status of the US might eventually become like the royal family of England. It will be in place for tradition but nobody will really give a shit about it.
APF - a place where serious people don't take themselves too seriously. There's nothing else like it.
it's just an observation and not what i think 'should' happen, but im happy to bet any member with over 1000 posts $100 this current fiasco won't lead to official declaration of default any time soon... nice cans in the lounge last night btw
I don't think a default will happen either. It should though.
I wonder what life is like in the Czech Republic?
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
America faces ‘‘financial armageddon,’’ one of the country’s leading economists has warned, as talks to end the political standoff in Washington teetered on the edge.
Professor Kenneth Rogoff, a former chief economist of the International Monetary Fund, compared President Barack Obama’s position to the 1962 Cuban missile crisis, when the Kennedy administration refused to negotiate with Cuba and the Soviet Union despite the threat of potential nuclear destruction.
‘‘It’s very hard to see a silver lining to this. It’s a constitutional breakdown [but] threatening financial armegeddon is blackmail,’’ Mr Rogoff, who is now a professor of economics and public policy at Harvard, told the Telegraph.
‘‘President Obama should push them [the Republicans] to the brink. This has implications beyond the moment. There is a danger of weakening the presidency on a long-term basis.’’
The picture is a worrying one for Australian investors if the impasse with the US debt ceiling is not resolved by the Thursday 3pm deadline (Australian eastern time).
If the debt ceiling is not increased, the US government is likely to default on the interest its pays on US treasuries, the bed-rock investment for the world economy. The first thing that would happen is the collapse of sharemarkets around the world.
That would affect almost every Australian, not just those holding shares directly, as the typical superannuation fund has about half of its money investing in global and Australian shares. It would be similar the collapse of US bank Lehman Brothers five years ago, which was allowed to fail, and marked the beginning of the global financial crisis.
However, analysts do not believe the doomsday scenario will come to pass. They say that the most likely outcome is that a life-line is negotiated in the US Congress, where the day that the US government runs out of money is pushed out further.
Craig James, the chief economist at CommSec, said the US political impasse will be sorted out because ‘‘there is no alternative but to the sort it out’’.
But pushing the problem into the future, rather than resolving it, will sap at investors’ confidence and slow the US economic recovery, said Shane Oliver, chief economist at AMP Capital Investors. ‘‘Markets will worry whether the US government defaults or not because the US has to cut its spending regardless.’’ One possible outcome of a continuing impasse is that international investors could favour Australian government bonds as a ‘‘safe haven’’, Dr Oliver said.
“Australia is one of the few countries with a AAA credit rating. But that would push the value of the Australian dollar higher and be bad for Australian exporters. It could lead the Reserve Bank to cut interest rates, which would flow on to lower mortgage rates,’’ Dr Oliver said.
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