In an almost eerie omen of what may come if the debt ceiling is not raised on US debt, the DOW Jones tumbled 1.2 percent in early morning trading. Whether or not stocks pare gains is not as important as the indicator that this reaction to both European debt troubles and stalled negotiations over the US debt means for the weeks ahead.
To Default or Not To Default
Most experts don’t believe the US will actually default, yet there is a vocal minority in favor of letting the system reset itself in order to get back on track and reduce the deficit. By constantly raising the debt ceiling, more money is printed and when that happens the dollars value declines, which is a type of default.
Either way it goes, the USA and Western economies are facing a serious test on their strength and viability for the future. This is actually important since the biggest growth is being seen in the emerging powers of India and China.
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