Warnings of an October economic collapse are now showing up in news reports about the United States debt ceiling deadline. With only ten days left before the United States reaches the debt ceiling, the two sides are at a stalemate.
Neither side shows any signs of giving in. House Speaker John Boehner said the House does not have the votes to pass a debt-ceiling increase without add-ons, such as defunding Obamacare. Meanwhile, President Obama says he will only be willing to negotiate after the shutdown ends and the debt ceiling is increased. In other words, give him everything he wants up front and then he will be willing to negotiate.
The Congressional Budget Office has reported that if the debt ceiling is not raised by October 17 the United States will be unable to borrow more money. As a result we will be unable to pay all of our bills, including benefits, salaries and interest, sometime between October 22 and October 31.
In a report released on October 3, the Treasury Department warned about the potential for catastrophic consequences:
“Credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket. The negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.”
An article published today by Bloomberg stated the danger as follows:
Failure by the world’s largest borrower to pay its debt — unprecedented in modern history — will devastate stock markets from Brazil to Zurich, halt a $5 trillion lending mechanism for investors who rely on Treasuries, blow up borrowing costs for billions of people and companies, ravage the dollar and throw the U.S. and world economies into a recession that probably would become a depression. Among the dozens of money managers, economists, bankers, traders and former government officials interviewed for this story, few view a U.S. default as anything but a financial apocalypse. [Continue reading]
So far, financial markets have not panicked over these reports, although they are starting to get nervous. The Dow Jones Industrial Average dropped by 143 points today. Whatever happens in the United States economy impacts the whole world because we have the world’s largest economy. European countries have still not recovered from the 2008 collapse of the housing market in the United States, as shown in my previous post: Four Dark Clouds Are Now Forming Over Europe. An economic collapse here would immediately impact world financial markets and would very likely cause the euro to collapse within a short time.
Given these dangers, it is more important than ever before to draw close to the Lord and get right with Him. The Lord offers protection and provision for those who follow Him with all of their heart. Find out more about how you can know Him.
Author: James Bailey
James Bailey is a blogger, business owner, husband and father of two grown children. In 1982, he surrendered his life to the Lord Jesus Christ. In 2012, he founded Z3news.com to broadcast the message of salvation by reporting end time news before it happens.
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