Quotation on the US Debt Ceiling By Steve Ruffley,Chief Market Strategist at InterTrader
There are increasing worries that the shut down in the US and the issue of raising the debt ceiling will cause a catastrophic global melt down. If this was in the hands of anyone else other than the USA I would be worried.
The fact is that the USA has raised the debt ceiling 78 times since 1960 – this is nothing new. To put it into perspective, the USA owes 23 times that of the $517bn Lehman brothers – which is a lot of money -but we are talking about the richest nation on earth, not a company.
When you think that the USD prices, the major world commodities, and every government and central bank hold some sort of US debt, if the USA defaulted on this even for one day it would literally stop the world financial markets functioning. My argument is that the USA is self-preserving; they have made it their aim to tackle terrorism and protect the way of the free market economy. Al Qaeda tried to disrupt this and would love to be responsible for a global financial meltdown. How can the USA have such an aggressive foreign policy to protect freedom, and then let their own internal policy and squabbling take them and the world down?
There will be an end to the shut down by Friday; the USA will not be responsible for its own undoing.
The rhetoric from Japan and China are now being made very public, that the USA has to address these issues – and quickly. Japan holds more dollar reserves and US debt than any other nation on the planet. This will have all have been made clear to Obama in private, but this public spectacle is now more than main stream.