Asian and European Markets Move Lower As Debt Crisis Deal Falls Apart:
How did the U.S. get so close to the possibly defaulting?
Asian and European major stock market averages fell Monday after Democrats and Republicans could not come to an agreement over the weekend on a solution to raise the debt ceiling limit. Congress must approve of the debt ceiling increase by August 2nd or the U.S. Will be forced to default on its debt and will not be a to pay its obligations. The U.S. also lose its coveted triple AAA rating from agencies which would cause many investors to change global portfolio allocations.
Why Is The U.S. At Risk Of Default?
The U.S. is on the brink of losing its status as the world’s reserve currency and the best place to invest capital. How did this happen? Several weeks of partisanship that started when President Obama got “tough” on taxes during his budget speech while government shutdown talks were underway which signaled no change from the November elections. The high level of rhetoric may have sullied the clean slate he needed to work with Republicans.
What to look for next:
We are carefully watching U.S. bond yields as well as gold to measure how they react to news about a debt ceiling deal. European markets were down .04 percent and Asian markets fell 1 percent in Monday trading.