What happens if the US defaults?

[fred]

If the unthinkable does indeed happen and the worlds biggest super power defaults and cannot pay its debts on time ,what would that mean for the Pound...The Peso and God knows what else!!
What currency would you choose to hold if you had the choice.. Me?..Im leaning towards the Euro..
Just watched CNN and they say that the UK holds the 3rd largest amount of US bonds!!:yikes:
Ouch..
Time to bail and change to Euro`s..or that Chinese money? Whatever its called) ?? Yuan?:Cuckoo:

[KeithD]

It won't happen. The US has already increased it 10 times in the last 10 years, it is only the small print they are arguing over on the cuts, both parties agree to increase the limit. The President can also use one of the Amendments to push it through without a vote if he so wishes.

[Bluebirdjones]

Yes, no agreement would effectively leave the US government unable to pay its bills – such as social security payments, Medicare, military salaries.

However, fiscal inflows should cover treasury coupon payments with room to spare for a few weeks and the US government can selectively close itself down in order to preserve cash. Maturing debt can be rolled over. Therefore, America is not about to hit the wall

The biggest potential scenario is that if the crisis continues, and US govt debt is called into default, then this means that banks would technically be barred from using US debt as collateral with central banks or the settlements clearing centres, (which will be Armageddon) although these rules could be changed…. like the ECB is contemplating for Greece.

If you’re that worried, switch everything into gold or Swiss francs.

[Steve.r]

I'm going to buy smarties

[Pete/London]

I dont think the Euro would be so good Fred, safest one all year has been the Swiss franc.
They have a few days to try to reach agreement before default, it would be interesting, they would not be able to pay their civil service and issue welfare cheques, so I reckon the police and firemen wouldn`t come out to deal with the riots and the whole country would go up in flames. That`s just in the States, think we had better stock up on tinned food.:yikes:

[fred]

It won't happen. The US has already increased it 10 times in the last 10 years, it is only the small print they are arguing over on the cuts, both parties agree to increase the limit. The President can also use one of the Amendments to push it through without a vote if he so wishes.



I know they have. This time it seems far different due to the young tea party senators with an agenda!!
From listening to interviews from them they seem pretty resolute to vote against their own parties proposals.. The house speaker(a Republican) has cancelled tonight's vote,which obviously means he would have got stuffed in the outcome.
My question is really about what would/could happen to the UK Pound if no compromise can be found?
also the peso as it is almost historically pegged to the US $$!!

Thanks for the Swiss Franks suggestion.... I`ll look into it further. Before its too late!:yikes:

[Englishman2010]

It won't happen, neither side will let it, the Politicians are just playing games to win a few concessions.

If anyone wants an alternative investment, I've got a few friends (including myself) who've dabbled with "Red Gold" or the classic Italian sportscar market, if you know what you're doing and buy right it is very rewarding and ultimately provides far more pleasure than any other form of investment:D

[Bluebirdjones]

what would/could happen to the UK Pound if no compromise can be found?

Actually, over the last few days the yield on benchmark 10-year UK government bonds, or gilts, has dipped below 10-year US Treasury notes several times.... indicating a flight to quality, or a safe haven for investors to temporarily park their money.

"Gilts are being treated as a safe haven," said Marc Ostwald, an analyst at Monument Securities in London. "It looks like the ball is being dropped in the US and it still threatens to be dropped in Europe."

[fred]

think we had better stock up on tinned food.:yikes:

Thanks.. Now Im getting visions of corned beef and Sardines for the next 6 months..:doh
Think its time to kill the livestock and buy another large chest freezer!!
Cheers,

Fred.

[fred]

Actually, over the last few days the yield on benchmark 10-year UK government bonds, or gilts, has dipped below 10-year US Treasury notes several times.... indicating a flight to quality, or a safe haven for investors to temporarily park their money.So is that good news or bad news??:Erm:
How do I park my money on a benchmark??
I hope you didn't mean a park bench!!

[Arthur Little]

think we had better stock up on tinned food. :yikes:

:omg: ... or go and get "half-canned!" :NEW1:

[Pete/London]

I dont drink until the US markets close at 9pm, although I do feel like it.I have had a week of highs and lows and today its been like watching an old brass`s knickers:doh

[Arthur Little]

I dont drink until the US markets close at 9pm, although I do feel like it.I have had a week of highs and lows :doh

:rolleyes: ... d'you mean dabbling on the Stock Market, Pete? I've never tried it. :NoNo: Too scared! :yikes:

[Arthur Little]

an old brass`s knockers :doh

:cwm24: ... an :oldlady:'s ... :Erm: ........ ? :yeahthat: Yeuch :vomit-smiley-011: ... perish the thought! :rolleyes:

[Pete/London]

madness helps Arthur:)

[Dedworth]

The Mancs were at the White House yesterday so not to worry the Glaziers will sort it out :icon_lol:

http://i.dailymail.co.uk/i/pix/2011/07/28/article-2020005-0D34853D00000578-735_634x440.jpg

[tone]

I wonder if they would have let the scousers that close...:D

Tone

[stevewool]

the world economy, has it put anyone off with there plans, not me

[Terpe]

the world economy, has it put anyone off with there plans, not me

Nor me :xxgrinning--00xx3: