Marini
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Joined: 2/14/2010
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quote:
ORIGINAL: DomKen
If the debt ceiling is not raised debt will come due for 2 months with no way to pay off the bonds, IOW default. Which will instantly make all US bonds worthless which will wipe out a huge amount of wealth, both in and outside the US. All major institutional investors will be wiped out. Investors suddenly in need of liquidity will dump other assets driving the stock market down sharply. Which means a lot of IRA's and 401's will be hit hard. Banks will stop lending again while they try to stay afloat. Many banks will fail as they won't be able to reach their reserve. That will cost people more money as the FDIC will be unable to pay off the losses as its money is in treasuries.
In short the US economy will collapse, the dollar will be worth more as TP then it will as money and the rest of the first world will be teetering on the edge of economic implosion.
Interesting scenario, DK.
Is there any doubt that the debt ceiling won't be raised?
Another question might be, "Could the US economy still collapse even after raising the debt ceiling?"
_____________________________
As always, To EACH their Own.
"And as we let our own light shine, we unconsciously give other people permission to do the same. "
Nelson Mandela
Life-long Democrat, not happy at all with Democratic Party.
NOT a Republican/Moderate and free agent
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