China warns U.S. debt-default idea is playing with fire | Reuters

China warns U.S. debt-default idea is playing with fire | Reuters.

As with any default, this can cause serious repercussions for the US financial system.

Although they indicate that default will only be for a few days, foreign investors (nations & individuals) will see this as an inability of the US to repay on loans. Foreign demand for US securities and bonds will decrease and negatively affect the ability of the US to borrow and invest. This could also devalue the currency.

There must be a better solution than this.

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About alonrishi

Economist at the Central Bank of Trinidad and Tobago Graduate of Florida Atlantic University (MS. Economics with a track in Finance, BA Business Economics) Interests in business, technology, automotive design and engineering, travel, food, amateur photography, and gaming. @alonrishi

Posted on June 9, 2011, in Business, US, World. Bookmark the permalink. Leave a comment.

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