In one respect (short-term marketwise) I find the whole debt ceiling issue a yawn-inspiring event... Think about it; what's the likelihood that we hit August 2nd without a deal on raising the government's self-imposed credit limit? I'm thinking the political risk is way too high, which is what the equity market has discounted to this point; last week's action clearly reflected the tone of Q2 earnings announcements... Next week however, if there's no deal struck over the weekend, may be a different story altogether...
Ultimately, all the grandstanding notwithstanding, I don't suspect we're about to experience the "first-ever" default on U.S. debt... "First-ever" that is, unless you consider (as you should) printing (devaluing) money to meet our obligations (which is essentially what we did when we exited the gold standard in the 30s and the gold [exchange] standard in the early 70s) a subtle form of default...
Stay tuned...
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