Let’s Talk… What Happens if US Defaults on its Debt!
I’m not a negative person but I write about questions I get asked the most about. IMO, if the US defaults on its debt, one word comes to mind… calamity. We would be talking about what is currently AAA credit quality becoming worth zero in the blink of an eye. Essentially most banks would be insolvent because they have to mark to market US treasuries on their books and show them as worthless. The credit market and banking system would be locked up like we have never seen. This would make 2008 look like a picnic.
Here is what needs to happen in the next few weeks.
- The debt ceiling needs to be raised because it is money we’ve spent in the past. We as a country need to pay our bills.
- Both sides in Washington need to put partisan differences aside and come together to do what is good for the country.
- Neither side is going to get everything they want. Again compromise!!
If the US defaults, the common person will feel it. Let’s hope that our leaders find a way out of this problematic situation.
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The opinions voiced in this material are for general information only and not intended to provide specific advice or recommendations for any individual.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
