What Happens If The Debt Ceiling Isn't Raised?

I suspect you are right Fredd! Just more smoke and mirrors and scare tactics to confuse,divide and immobilize the average citizen.

If we default on our USA government bill/bonds (it will be settled before then) then our credit rating will drop and we will have to pay more interest to attract buyers. As money becomes more expensive for the gov't, it then becomes more expensive for its citizens. Metals should fly through the roof, safe haven and better return.

KK

Bigg do you subscribe to the "Real Wealth Report"?

There certainly are a lot of different definitions of default.

Yeah I generally don't like paying for advice either. I just wish I was better at creating my own lol.

As I see it, we have a combination of real effects in the various markets and some psychological effects added to that. This is the old, "I wasn't burned by it but I thought that I was" story. Those who think that they are burned will yelp just as loudly, if not louder, than those who actually were burned.

The market may be baking the higher costs and interest rates into the current market value. If they are, then not reaching a political agreement by 8/2/11 will have minimal to no consequences from the market psychology angle. If they haven't baked this into the current market value then there could be a substantial market pull-back. Flip a coin?

None of the comments I've heard from professional traders and investors even remotely suggests that anyone thinks that the US government actually merits a credit rating of AAA. Most are saying that AA or A should be the REAL credit rating of the US. Considering the financial incompetence that has been displayed by most of the politicians, Fed chiefs, banksters, et al, I would think that a grade of C might be more appropriate.

I have to laugh a bit whenever people on TV start talking about the effects of a "default". They say that all interest rates will rise and that it will cost more to borrow money. OK, fine. Perhaps that would be a good thing. It would make it more difficult to go into debt AND it might finally get a little more money into the hands of savers. You know... the people who actually fund the economic expansion that creates jobs. This does not sound like an Earth-shattering problem to me. As with everything else that happens, the market will adapt to it in one way or another.

Of course, we all know that if no accord is reached by 8/2/11, the government will still have sufficient funds to pay for those things that are the most important. What they will not have is another $1.6T on top of that to fritter away on tunnels for turtles, shrimp treadmills, ketchup research, and a host of other trivial and useless crap. Oooohhh, BIG tragedy there.

They have no intention of getting out of debt! This whole thing is a charade for the 2012 election. Posturing,posing and pandering is all that it is. Just keep buying PMs,and sit back and watch the whole house of cards(actually debt and funny money)collapse on itself. Hide as much wealth as you can because they will be coming for it. Food,water,ammo,weapons and PMs!

It worked on me. I'm scared because I don't know if I'll get a Social Security check next week or not. If I don't I'll lose my house and car within the next 60-90 days and that, as they say, will be that. It's okay though, because if I can't pay for the medications I need, I'll die anyway.

Cross your fingers for me. It's gonna be close.

They are gonna raise the debt ceiling I'm tired of seeing all this political theater. They say it will be catastrophic if it doesn't get raised but I disagree. Its just like if one of us maxed out our credit cards. We still bring in money to pay off our previous debt owed we would just have to start living within our means which our government hasnt done in a long time. What will be more catastrophic is when they raise the debt ceiling, print more money out of thin and pump the economy with for bad money, and devalue the dollar already more than it is. We might all be witnesses to the collapse of the American dollar.