morning post Europe's debt crisis has not gone, United States appears to be from the debt crisis increasing near. United States legislators on June 12 local time (Beijing time yesterday morning) in Colombia broadcasting companies (CBS) "national" (Face the Nation) on the program said if Democrats and Republicans do not increase the federal debt ceiling agreement, United States Government will not be full payment due on August 2, US $ 30 billion debt, United States and European countries also fell into default risk.
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it was also United Kingdom Financial Times reported yesterday that United States senior bank executives revealed that some of Wall Street's biggest banks have been prepared in August cut the United States Treasury, to prevent does not increase the debt ceiling as a result of any market volatility.
Bernanke this or a stern warning
from the preceding statements on the CBS program is United States Chairman of the Budget Committee, Republican representative baoer·ruian (Paul Ryan). He said on the show, "I think debt reduction agreement reached to control the deficit helped to stabilize the market in the future, and can help us to achieve an economic recovery. "
now Republicans and Democrats are the key differences is how to reduce the deficit. The former believes that the Obama administration should undertake to reduce expenditure in order to reduce the deficit, in that premise in order to raise the debt ceiling; decision while the latter considered that the current economic situation the Government cannot reduce expenditure, to reduce the deficit can be achieved by giving tax the rich. To this end, the two parties since late May has been controversy, but still no progress until yesterday.
in fact, in 14th, local time (Beijing time tomorrow morning), Fed Chairman Ben Bernanke will attend the theme of "debt ceiling, financial planning and panic in the market: where do we go? "Meetings of the General Bernanke is expected to be the market today to the United States Congress issued a stern warning again, do not increase United States debt ceiling as a political bargaining chip.
he had previously stated that "cannot increase debt ceiling would be likely to be at the expense of raising interest rates, which would allow United States deficits worse and harm the interests of all borrowers. Worst of all, this could result in United States financial system back into instability, the United States economy particularly terrible impact. "
Wall Street rainy day
given the two parties over the situation, the banking sector has begun to plan ahead.
United Kingdom Financial Times yesterday cited an United States senior bank executives as saying that some of Wall Street's biggest banks are preparing in August cut the United States use of Treasury bonds to prevent any fluctuation in the market. It is reported that the banks plan to hold more cash, derivatives and other trading for security, thus reducing financial system of the United States national debt dependence.
"we plan to reduce its reliance on government bonds in early August, retained more cash as an emergency measure. "The United States a Bank Executive said.
United States national debt amounted to us $ 9.7 trillion, a significant part was sold to national investors. But according to JPMorgan Chase (JPMorgan Chase) estimates, United States near 40% issued bonds (about US $ 4 trillion) to support the buy-back transactions, futures and swaps. Precisely because of United States national debt plays such a key role for the wider financial system acts as a collateral, once by the two parties in the game and increase the debt ceiling raised debt default, leads to the financial system into chaos.
the CME Group (CME Group), said: "as the United States close to debt ceiling, we will continue to monitor liquidity conditions and appropriate collateral for discount. ”
