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Durudarshan - Investment Analysis

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What would happen if there were no Debt Ceiling raise?

Posted on October 8, 2013 at 3:41 PM
Each one can imagine some kind of bleak scenario, in the event that the Debt Ceiling was breached and there was no agreement in Washington between the Republicans and Democrats. 
 
At the moment, the world watches in exasperation as the two sides debate and give a very mixed impression.  As they gleefully remain entrenched as to what they will concede or not, the time is ticking away to 17th October. 
 
Japan and China have wondered at the shutdown, and why it is not being lifted swiftly.  In those nations, such a situation, were it ever to arise, would be reversed as a matter of honour and in the interests of not impeding the economic engine.  It would be done swiftly with a command from the leadership. 
 
In the U.S., by contrast, as is the nature of democracy, every fine detail has to be debated.  That is fair enough, but time is running out nevertheless.
 
In the event that there is no Debt Ceiling raise by 17th October, one can envisage a bleak picture where government will not be able to pay its employees, which of course also includes the Representatives and Senators who have defended very narrow corners and brought about the current shutdown and the furloughs, disrupting peoples' daily routines and reducing their paypackets.  Of course this would have an impact on the economy overall were it to continue for any length of time.  Just over a week has gone, and the mood on the stockmarket has been subdued.  If it were to continue for consecutive 21 days, probably it would cause a disheartening mood, which would dampen the feelings and start a down-turn.
 
Secretary of State for the Treasury Mr Jacob Lew has said there would be about $30 billion for cash-flow, in a 'four trillion dollar enterprise'.  That may be sufficient for 12 days, which would take everyone to 29th October.  If there was no agreement by then, can you imagine anything but the stock markets falling, a fear factor and a lack of confidence, people being laid off by private enterprises as well.  I would bet the Oil price would plummet, demand would be so drastically reduced.  The domino effect would be worldwide, nothing short of alarming.  It would be like looking at Greece in its recent dark days, only the U.S. is a much bigger economy, with over 16 times the population of Greece.  Not only that, what is the sovereign currency of a well-functioning economy and the Reserve Currency of the world would have its standing compromised. 
 
I trust they have some arrangement in place, whether by bi-partisan co-operation, putting aside for the moment the other issues which are dividing them at the moment, and agreeing to a Debit Ceiling raise by 17th October; or, arrangements in place to allow the President to exercise his prerogative under the 14th Amendment and sign in an amount that would be prudent and necessary. 
 
Mr Obama has mentioned that the debt burden has been reduced by Two and a Half Trillion in the last few years, so his Administration's policies have been productive and praiseworthy, pulling the whole economy out of a severe recession and creating a nation with huge heatmaps of happiness, which have  provided growing confidence worldwide.  The sooner the uncertainity regarding the Debt Ceiling raise is removed, the better will it be for the whole world.  America's well-wishers and creditors alike would feel good, a positive mood of certainity and predictability for future growth would continue worldwide.
 
The last Debt Ceiling raise in August 2011 has proved efficacious, and so there would be universal approval and applause for such a measure this once also.  Those who believe in doing right by their fellow humanbeings, let them also do right by the currency that says 'In God We Trust'. 
 
Kind regards,
Duru-darshan.
 

Categories: Accomodative Stance., Best in the Industry, China - positive signs, Cultural harmony, Debt Ceiling, Detroit, Divine Guidance, Expansion the key, to avoid recession in midst of plenty., From Recovery to Prosperity, How does money get to the real economy?, Investment Analysis and Management, Japan - Prayer for continued recovery, Job creation for youngsters in U.K., Jobs and growth, Jon Bon Jovi, Rockstar, Humanitarian, a Heart of Love., Kimberley Davis, Sarsaparilla, Light a candle....to Prosperity, Micro and macro - chocolate, fruits, money., Money supply, Mr Maponya, a dream city in South Africa., Oil price far too high, Oil Price, Interest Rates and Recovery, Right to Work, Obamacare, competitive wages., Selective Immigration, The Affordable Health Care Act - great news., The God Particle., The US Housing Market, U.S. shutdown, Utah, Website traffic streams, Welcome, Worldwide Economic Recovery, www.durudarshan.co.uk, Zimbabwe - may it continue with fair policies

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