Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
If the US Defaults On It's Debt Will this Crash the Stock Market?
I had a spam email saying bad things about the US economy if the US Gov defaults. Like maybe the US Dollar will no longer be world currency and that gas will not be traded in dollars and so it will get very expensive.
If the US Defaults On It's Debt Will this Crash the Stock Market?
I had a spam email saying bad things about the US economy if the US Gov defaults. Like maybe the US Dollar will no longer be world currency and that gas will not be traded in dollars and so it will get very expensive.
What do you investing experts think?
What is a crash number to you? 10k......5k.....2k......0?
i wont single any particular party out if this blows up. i will make sure i vote as many out of jobs as i can on both sides..as far as im concerened both sides failed the american public over the years.
lets be real ,every american wants the cuts to be where it effects themselves the least.
the reality ,there are only four areas that account for 80% of spending.
social security,medicare,medicaid,defense spending... thats it.....
we need higher taxes across the board and cuts in these areas. there is no way around it. some of the cuts can be quite transparent too.
the ability to suspend your own social security while taking half a spousal benefit and letting your amount grow is one area where hundreds of millions can be saved . i love the fact you can do that and its part of our own plan in 2 or 3 years but heck its crazy to offer that when we are broke.
Stock market valuations are largely determined by corporate profitability on a global playing field, flat or crooked, whether measured in USD or something else.
Yes, there may come a day, sooner or later, when oil is no longer traded globally in USD or priced in terms of USD. Yes, a purposeful US sovereign debt default could make that sooner than later.
In any event, without an increase in real productivity (not headline productivity as currently measured), in both absolute and relative terms globally, the standard of living for the average person on US soil will stagnate or decline.
History shows that, during periods of stagnant or declining productivity, money illusion works most of the time, often for a long time, and the job of monetary policy, as a tool of population management, is to mask this decline.
Therefore the most likely outcome is that the politicians will fudge some sort of increase in the debt limit, while tinkering, or pretending to tinker with, spending cuts and tax loopholes; this means inflation, more or less visible at this point but vanishing at another (money illusion) with the effect that, within 20-30 years, say, the average social security check will be $3,000 a month, enough to buy a ration of beans, flour, and cooking oil (ask Fidel), perhaps also pay the water and electricity bill; medicare coverage will be measured at, say, $3,000, enough to pay for a band-aid.
Increasing taxes could be part of an overall package, but the long-term effect will be nil, at best, if any such increase in government revenue is not used productively.
History also shows that corrupt men, along with bad fortune, can topple even the most carefully designed, good-intentioned institutions.
Whom do you trust?
Timing the stock market is very difficult, if not impossible. Your best bet is to diversify, or stay diversified, with a long-term view across asset classes, currencies, and even jurisdictions if you can, focusing on those sectors of global society in a position to dominate and prosper, or at least hold their own, regardless of the destiny of this or that single nation-state government and its population.
The market will crash if the US defaults, but that won't happen. A few Wall Street CEO's contacted some GOP members expressing their concerns to which they were told it's just politics, don't worry a plan will pass before the US would default.
Well that e-mail is assuming that the default results in hyperinflation of the dollar. Which is realistically what will happen but not in that order. Rather, the us will continue to print the dollar and the dollar will lose all its faith. When that happens the us will indirectly default on its debt.
However, that is a long ways off from happening.
If you guys haven't noticed the whole default on debt thing is just political theater. The bottom line is that both dems, republicans and tea party is screwed if the us defaults. They won't let it happen however, we do have to realize that continually raising the debt limit it not good in the long term. It destroys long-term growth because we have to pay interest on all that money we borrow.
If you don't think the us will dump social security or medicare to pay the interest, you'll be surprised when they do.
There is a possibility of a default. However slight. It is still an option in order to collapse the dollar and the euro.
Some would like to see a new currency. Those that do want this new currency have some power in the world.
As myself and others have been saying: there will be no default. This is all pure popcorn drama and political theater. BOTH sides will cave in and strut out on the steps of the Capitol arm-in-arm trumpeting a "new spirit of bipartisan cooperation and compromise for the good the nation." The ordinary Joe-Schmo taxpayers will [one again] continue to get shafted one way or another, while the banks will get a fourth trip to the buffet table because they are 'too big to fail'.
-all at the 11th hour and "just in time".
Mark my words.
As for the dollar? It won't be allowed to collapse, but this weakening of it is absolutely deliberately engineered and intentional. Look up "inflating the National Debt and Trade Deficit" away.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
