How about the heated debt-ceiling debate on Capitol Hill up until the last minute, followed by some missed Treasury bill payments?
If the US does default and that actually leads to a worldwide economic collapse, it won’t matter where one has money. If it doesn’t default, or a default just affects the Government’s credit but does not affect the markets, one will want to be fully invested to take advantage of any resulting run-up in stock prices. If there is a drop, one may be able to pick up equities at great prices, leading to higher returns in the future.
Tensions are boiling over in Washington as U.S. lawmakers negotiate a plan to raise the $14.3 trillion debt limit. With an Aug. 2 deadline fast approaching, the U.S. government is nowhere close to forging a deal -- an impasse that puts its impeccable triple-A rating at risk.
A downgrade would be bad news for the overall economy on various levels. Much attention has focused on how it could impact consumers: Interest rates for U.S. Treasury bonds would rise, which would lead to higher borrowing costs for everything from home mortgages to car and school loans. And with a fragile economy still slowly recovering from a deep recession, such shocks to the market could send the U.S. back into a downturn.
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