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48 Hours to Global Financial Meltdown!

October 15, 2013

dollarfire_1960965c

That’s how much time is left for politicians in the US to work out a deal to raise the borrowing limit and avoid an unprecedented US debt default.

COMPLETE AND ABSOLUTE CHAOS!

The deadline looms as the US government shutdown enters its third week with no signs of abating.

It’s a political showdown that threatens to plunge global financial markets into absolute chaos in just two days unless a solution to the impasse can be found.

THE GLOBAL MELTDOWN HAS ALREADY BEGUN!

Some reports suggest the global meltdown has already begun and could be 16 time worse than the 2008 Global Financial Crisis!

The global faith in US institutions is already hanging by a tenuous thread.

In fact, the wheels of impending doom are already set in motion with financial markets bracing themselves for the prospect of a US government default.

As a result, economic growth in both the US and the rest of the world is now trending lower than it should be.

Unemployment is nudging higher and social unrest around the world is increasing.

These things aren’t as bad now, as they will be should a debt default occur.

Just like the GFC, once trusted institutions like “the banks”will crumble, but unlike Lehman Brothers, this time it’s the US government that faces a credibility crisis.

The insane level of Washington dysfunction on display right now can be directly attributable to the so-called “tea baggers.”

Outside their own insular circle of right wing nutjobs and conservative religious zealots, they are widely regarded as certifiably insane, yet are now holding the US, and the rest of the world to ransom, for the sake of making a political point.

Ideologically, they are fundamentally opposed to equal access to healthcare for all, or at least, not if they have to sacrifice some of their superfluous wealth to fund it.

Every day that goes past is a day where trust and faith in the US government is evaporating — and once it has evaporated, it will not return.

The Republicans in the House have already managed to inflict significant, lasting damage to the US and the global economy — even if they were to pass a completely clean bill tomorrow morning, which they won’t.

The default has already started, and is already causing real harm. The only question is how much worse it’s going to get.

 

 

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73 Comments leave one →
  1. Splatterbottom permalink
    October 15, 2013 3:28 pm

    Crisis? What Crisis?

    This is just political theatre as usual in the US. It has happened often enough before. As I understand it the Executive implements the laws Congress passes and spends the money Congress allows it. Neither the Senate nor the House wants to pass Obama’s Budget so he depends on piecemeal funding.

    The US government certainly has enough money to pay its interest if it really wants to. It just chooses to spend it on other stuff. Obama will cut other expenditure or cut a deal with the Republicans. Either way the interest will be paid.

    The US debt has got to a point where it is just “some impossibly large number”. No one has any idea how it will ever be repaid and the big government politicians on both sides seem to think it can keep growing without real consequence. That was where Australia was headed under Labor. The Liberals say they want to pay the debt down, but haven’t explained how that fits in with their spending promises. It is difficult even now to understand how we can repay our debt.

    The only reason the US hasn’t gone the way of Greece is that other countries want its currency for purposes other than trade with the US. The more the US debases its currency, the sooner the rest of the world will work out a better alternative. Then there really will be trouble.

  2. egg permalink
    October 15, 2013 3:41 pm

    ‘The Liberals say they want to pay the debt down, but haven’t explained how that fits in with their spending promises. It is difficult even now to understand how we can repay our debt.’

    My thinking is they intend growing the country over the next decade, through rapid transport and decentralisation. By increasing the population with cashed up immigrants, with the spirit of free enterprise, we should get back into the black before too long.

    This is pure speculation.

  3. Splatterbottom permalink
    October 15, 2013 4:07 pm

    So how long do you think it will be before we have $250bn of budget surpluses?

  4. Neil of Sydney permalink
    October 15, 2013 4:14 pm

    We are in danger of losing our AAA again. This will mean that companies and the Australian govt have to pay a higher interest rate on borrowed money if we lose it. We are already paying much higher rates than a lot of countries and that is with a AAA.

    There is a budget emergency but what to do about it??

  5. egg permalink
    October 15, 2013 5:23 pm

    China has been extending its currency swap arrangements, unlike the liquid US dollar the RMB is more stable. Its seriously considered the reserve currency no matter what happens in a couple of days.

  6. Neil of Sydney permalink
    October 15, 2013 5:57 pm

    A bit off topic but this is BS

    http://www.news.com.au/breaking-news/national/tribunal-to-rule-on-qld-pollie-pay-rise/story-e6frfku9-1226740055366

    QUEENSLAND politicians will receive an eight per cent pay rise, taking their base salary to $148,848. ”

    It is news to me that inflation is running at 8%.

  7. October 15, 2013 6:21 pm

    I think they were originally after something like a $57 000 pay rise, Neil. 😯

    That story lead me down an alley where I learned that SA MP’s are the highest paid in the country…@ around $150 000. Which lead me into the dark recesses of my mind where I raged at the arrogance of a government (and its enablers in the Opposition in SA, coz, let’s face it, both sides vote to give themselves a payrise) which has been there too long & acts with impunity [until March{?} next year].

  8. October 15, 2013 6:23 pm

    I honestly think that the conservatives are allowing the Tea Party to soil their brand in the US, with this brinkmanship.

    I don’t think it will win them any new fans. There or abroad.

    It is a disturbing precedent to set, in so far as holding a government to ransom goes.

  9. Splatterbottom permalink
    October 15, 2013 6:39 pm

    “It is a disturbing precedent to set, in so far as holding a government to ransom goes.”

    Constitutionally Congress is as much a part of the government as the Executive. This is a disagreement within the government. When they are done posturing they will reach an agreement. It is just political theatre.

  10. October 15, 2013 6:46 pm

    I agree that it is political theatre, splatter.

    But, honestly, how much of the rest of the world, let alone the bulk of insular, ignorant US citizens ‘get’ that?

    It’s political brinkmanship at its worst.

    If it’s so inconsequential (not that that’s what you said)…why do the global markets care?

  11. October 15, 2013 6:47 pm

    Do you think it casts a (net) positive light upon the Tea Party, in the eyes of those who aren’t already ideological lickspittles?

    * serious question…

  12. October 15, 2013 6:48 pm

    Kinda makes me glad of the system of government we have here…where such grandstanding would be forced to a head much more readily.

  13. Splatterbottom permalink
    October 15, 2013 7:00 pm

    TBoss I suspect that the Tea Party will look pretty stupid when this is done. But for those who want to see the USD cease to be the world’s reserve currency, this might do it. It would also accelerate the US’s loss of status internationally, although Obama has been doing a fair job of that on his own.

  14. October 15, 2013 7:06 pm

    Yeah…I find it passing strange that the side of politics which preens itself on American Exceptionalism & flagsturbates with great abandon, would allow the nationalist brand of the US to be tarnished thus.

    I mean that in terms of Realpolitik.

    It’s really a zero sum game, just to force an ideological point (right or wrong).

  15. October 15, 2013 7:08 pm

    Also, I think GWB did made a large contribution towards accelerating the loss of US status internationally.

    I don’t think the world outside of the US sees it as it sees itself.

  16. egg permalink
    October 15, 2013 7:09 pm

    It seems that 74% of US citizens think the Republicans are to blame for the log jam.

  17. October 15, 2013 7:09 pm

    “It’s really a zero sum game, just to force an ideological point (right or wrong).”

    Yep.

    But the bat shit crazy tea baggers don’t care how many American families will be destroyed along the way…

  18. October 15, 2013 7:10 pm

    “It seems that 74% of US citizens think the Republicans are to blame for the log jam.”

    That low huh?

  19. October 15, 2013 7:19 pm

    I’d be genuinely interested in IPA’s take on the ‘drama’.

    I think also, that we have a bit of a different perspective here in Oz because we have a workable version of universal healthcare which we tend to take for granted (for all its many shortcomings).

    The US is a different kettle of fish entirely.

    I realise that Australian politics seems to be increasingly polarised…but over there, they’re escalating that in extremis.

  20. October 15, 2013 7:20 pm

    Whooooooaaaaaaa…trippy theme change!

  21. egg permalink
    October 15, 2013 7:38 pm

    ‘That low huh?’

    Republicans surveyed were evenly divided between the hard right teabag supporters in agreement and traditional conservatives against.

  22. egg permalink
    October 15, 2013 7:40 pm

    This new look might increase visitor numbers.

  23. Tom of Melbourne permalink
    October 15, 2013 7:41 pm

    I like the tartan, what’s the clan?

    (I was quite keen on a lass who lived in Edinburgh)

  24. Tom of Melbourne permalink
    October 15, 2013 7:42 pm

    I blame the Republicans for this disaster. American international status is generally higher under Democrats.

  25. October 15, 2013 7:44 pm

    New look – do you like it or do you hate it?

  26. October 15, 2013 7:52 pm

    I be down widdit…

  27. October 15, 2013 7:53 pm

    Moses Iscariot! it changed again as I commented!

    These times we live in!

  28. October 15, 2013 7:54 pm

    Is this one better boss? Or do you prefer the other new one?

  29. TB Queensland permalink
    October 15, 2013 7:54 pm

    Ve-e-e-e-e-ry 1950’s, sreb … noice … where’s the jukebox?

    In all your guessing, just remember that some of us live of our income via % returns + a lifetime of work and savings …

    Cash = crap return

    Shares = wobbly as shit return (now!)

    Bonds (Fixed interest) = the worst return in decades (until the USA default)

    Property = not a chance of return

    And when Teabaggers make statements like: “Maybe the US should default …” who can “guarantee” they wont?

    This isn’t academic, this is real … they may reach an agreemrnt … but people also denied the GFC … and laughed at JohnMcPhilbin and me for almost 12 months …

    As for fkn America … I’m fkn sick of being controlled by a country and government that I have no say in (who does?) … a crumbling empire of fkn wannabes …

    Where’s my “Learning Mandarin” podcasts …

    China really IS laughing all the way to world denomination – ironically through commercial and economic invasion … maybe I should get rid of the Tanekah, Quran abd Bible on my library shelf … 😆

  30. TB Queensland permalink
    October 15, 2013 7:55 pm

    What The!

  31. October 15, 2013 7:55 pm

    You need a poxy banner at the top which changes periodically to reflect outdoor dining settings & incongruent pictures of European landscapes…just to keep the knitting circle guessing.

  32. TB Queensland permalink
    October 15, 2013 7:56 pm

    Loike the gravatars!

  33. October 15, 2013 7:56 pm

    I think i like this one cos we get to see our avatars with comments…

    I might change the header banner tho…

  34. October 15, 2013 7:57 pm

    The other new one was freaky & cool…but it wasted a bit of space with margins.

    Whatever you decide on is fine by me. A change is as good as a holiday…(not really, but change of aesthetics is good).

  35. October 15, 2013 7:57 pm

    “You need a poxy banner at the top which changes periodically to reflect outdoor dining settings & incongruent pictures of European landscapes…just to keep the knitting circle guessing.”

    LOL… maybe I could rotating insults…?

  36. October 15, 2013 8:01 pm

    Yeah, I do like to be able to see commenters gravatars.

    I think splatter has the market cornered for the coolest, most thought provoking one though.

    My facebook account has no actual information about me. Certainly not my real name, more of an offensive combination of words. My ‘profile pic’, which has never changed, is actually a post op photo of one of our cat’s rear ends, the day he came home from the vets after being neutered…complete with empty sack, stitches & shaved flanks.
    It does raise a few eyebrows on occasion.

  37. October 15, 2013 8:02 pm

    “maybe I could rotating insults”

    Sounds great!

  38. October 15, 2013 8:04 pm

    Cool, I might settle on this theme then Boss…

  39. October 15, 2013 8:06 pm

    Ack! I changed my mind….

  40. egg permalink
    October 15, 2013 8:20 pm

    I like the old look.

  41. October 15, 2013 8:27 pm

    Me too egg…

    Fuck modernity!

  42. TB Queensland permalink
    October 15, 2013 8:41 pm

    Awwwwww …..

    Then I remembered wher ya frum, Jummy!

    Us trew chainge un yer blude, laddie … thets tha kweestchun … ??

  43. TB Queensland permalink
    October 15, 2013 8:42 pm

    Should I throw all my capital into cash?

    Where’s, Wally when you need him?

  44. IPA permalink
    October 15, 2013 8:49 pm

    “If it’s so inconsequential (not that that’s what you said)…why do the global markets care?”

    They don’t.

    Not increasing the debt limit does not mean the US can’t or won’t pay its debts. It might mean they can’t pay for something, but that doesn’t have to be its debt repayments. In fact, the US government is bound by the constitution to pay its debts, so they may have to cut another social program instead. Shame.

    The Tea Party branch of the Republican party is doing exactly what its constituency sent it to Washington to do: (try) to decrease the ever-expanding size of government. They are taking a stand, and the big government trough-snouters (I like that term, whoever said it) do not like it one little bit.

    By the way, what’s happening in the US is nothing more that denying “supply”, as has happened here before. It’s just that in our case it leads to a double dissolution.

    As for the government “shutdown”.

  45. Tom of Melbourne permalink
    October 15, 2013 10:10 pm

    Obama has introduced a safety net for health, something that is supported by all shades of politics here. The Republicans seek to undermine it, and use unsavoury tactics to do it.

    Fraser behaved outrageously when he used the tactic to bring down Whitlam**, I think Republicans deserve the same condemnation.

    (**of course I was a mere child at that time)

  46. Tom of Melbournr permalink
    October 15, 2013 10:35 pm

    Some photos of bland German buildings would be nice. Maybe even an Austrian or Swiss one occasionally.

  47. IPA permalink
    October 16, 2013 9:01 am

    “Fraser behaved outrageously when he used the tactic to bring down Whitlam**, I think Republicans deserve the same condemnation.”

    A small point of difference: During the 1975 Australian constitutional crisis, the Coalition-controlled Senate refused to pass money supply bills sent to it by the Labor controlled House. In the current US case, it’s the Democrat-controlled Senate that is refusing to pass appropriation bills sent to it by the Republican-led House.

  48. Splatterbottom permalink
    October 16, 2013 9:09 am

    Whitlam was fucking up the country. Parliament was in a stalemate. The G-G did the reasonable thing and put the matter back to the people. Whitlam suffered the judgment of the masses at the ensuing election. Ever since then Labor sooks have cried foul. Meanwhile the voters were just grateful for the opportunity to flush that arrogant racist mongrel into the sewer of political oblivion.

  49. Tom of Melbourne permalink
    October 16, 2013 10:03 am

    I wasn’t aware that Whitlam was racist.

    During the early-mid 70s every developed country had high inflation and increasing unemployment. It hardly abated under Fraser, he presided over rampant inflation and high unemployment. That said, Whitlam’s government was dysfunctional, quite untidy.

    Whitlam’s reforms in health care, foreign policy (Vietnam, China and US relations) and education have stood the test of time.
    ======
    Comparisons between our HoR and Senate and equivalents in the US are difficult. But health care in the US is a disgrace, Obama has introduced a modicum of a safety net. We take a more generous scheme for granted.

    Republicans are rightly being punished by the public.

  50. Splatterbottom permalink
    October 16, 2013 10:38 am

    “I wasn’t aware that Whitlam was racist.”

    Whitlam famously referred to the Vietnamese boat people as “fucking yellow Balts”. He treated them disgracefully.

    “Whitlam’s government was dysfunctional, quite untidy.”

    True enough. He had a commo in cabinet. He sold out the Timorese to Indonesia. He tried to get the Iraqis to donate $500k to the ALP (but the middle man stole the money). The Khemlani loans scandal didn’t reflect well on him either. Hawke rightly observed that the only way he would drive the economy was down, and that Whitlam was stupid.

    “Whitlam’s reforms in health care, foreign policy (Vietnam, China and US relations) and education have stood the test of time.

    Not quite. The health care reform was good (I supported it and invited Tom Uren to UNSW to speak on the matter at the time.) His policy on Vietnam didn’t do much for the people of Vietnam who subsequently endured thirty years of communist tyranny. His education reforms were stupid and have been largely reversed. The previous system provided scholarships for the less well off. Whitlam provided free university education for everybody with the result that workers funded the children of the rich to go to university. And besides that he was a smug cnut.

  51. Splatterbottom permalink
    October 16, 2013 10:48 am

    From an Article in the NYT:

    An earlier version of this article misspelled, on second reference, the surname of a representative. He is Charlie Dent, not Debt.

  52. Tom of Melbourne permalink
    October 16, 2013 11:37 am

    The current system of HECS is a disgrace, and Whitlam’s reforms which provided free education produced a generation of tertiary educated people. While some tweaking may have been beneficial, it was far better than loading up kids with a mortgage, before they even get a job.

    Vietnam was already a debacle, and Whitlam can hardly be blamed for the actions of the government. Suggesting that he had some responsibility for the outcome is odd.

    Little pieces of former colonies, such as the half an island Portugal used to display their flag in the region are always contentious. Half an island with some Portuguese history surrounded by a huge former Dutch colony isn’t really the formula for a new nation. East Timor too was always going to be a huge problem and I’m not sure the blame belongs with the Whitlam Government.

  53. Splatterbottom permalink
    October 16, 2013 11:57 am

    ToM, I don’t have a problem with people paying for their own education, usually it enhances their earnings prospects. If they do it for some other reason then it is a luxury they should pay for. I do have a problem with middle class welfare and Whitlam’s grandiose scheme was exactly that. The previous scheme was better in many ways.

    “Vietnam was already a debacle, and Whitlam can hardly be blamed for the actions of the government. Suggesting that he had some responsibility for the outcome is odd.”

    Vietnam was indeed a debacle. Suggesting that Whitlam had some kind of policy triumph in relation to Vietnam is decidedly odd. They inhumane way Whitlam dealt with the refugees from a communist totalitarian state was deplorable, especially given our involvement in the war.

    It is also odd that Whitlam preferred the realpolitik of selling out the Timorese to Indonesia whereas Howard actually did something to help them. Whitlam could have been more principled on this. Maybe it was just different policies for different times, but it doesn’t reflect well on Whitlam.

  54. egg permalink
    October 16, 2013 12:39 pm

    ‘WikiLeaks’ declassified US diplomatic cables questions the perception of Indonesia as a premeditated invader, after Mr Whitlam rejected a proposed joint peacekeeping army involving Australia, Indonesia, Malaysia, Portugal and New Zealand.

    ‘The cables infer the indifference of Mr Whitlam, as prime minister, paved the way for Indonesia’s 24-year occupation of East Timor.’

    News.com

  55. TB Queensland permalink
    October 16, 2013 12:53 pm

    … whereas Howard actually did something to help them …

    With a bit of clout from our “friend” the USof A … and the UN …

    And then promptly robbed them … typical Robber Baron … sets up a “society” and then steals their income …

    East Timor to Howard meant one thing gas, gas and more GAS! Howard too was a smug cnut …

    I agree with most of your comments BTW … Whitlam was a disaster in many ways … I was talking on Monday about his stupid decision to make PNG independent in 1973 … and Vietnam was almost “dead” by the time he got involved and then all he did was reduce NS from two years to 18 months … it was all over by 1972, a decade of wasted lives and wasted time by ignorant politicians playing at warlords with young men’s lives … because of the fear of an ideaology … fkn stupid and fkn criminal!

  56. October 16, 2013 7:47 pm

    Tick, tock, tick, tock…

    Will the teabags cut off their nose to spite their face?

    After all, introducing a safety net for health, or even contemplating doing such a heinous thing, should be fought against with an ideological zeal of fundamentalist arrogance.

  57. October 16, 2013 7:57 pm

    Are we dead yet…?

  58. egg permalink
    October 16, 2013 8:05 pm

    SHANGHAI, Oct 16 (Reuters) – China’s yuan traded at 6.0997 per dollar on Wednesday morning, setting a new record against the dollar for the third consecutive day, and also broke through the psychologically important resistance level of 6.1 per dollar.

  59. TB Queensland permalink
    October 16, 2013 8:40 pm

    Will the teabags cut off their nose to spite their face?

    One wanker stops the world … we have to develop better sytems if they can do this … I know … shoot the bastards!

    I can’t take the chance … shifted to cash today … there’ll be minimum return but at least I can buy back in … after the assasination!

    We simply can’t play brinkmanship with our lives … I’ve come to really hate the bastards since the GFC … I just thought they Dickheads after VN …

    I really do sympathise with the middle east right now …

  60. egg permalink
    October 16, 2013 9:20 pm

    ‘The European Central Bank and the People’s Bank of China agreed to establish a bilateral currency swap line, bolstering access to trade finance in the euro area and strengthening the international use of the yuan.’

    Bloomberg

  61. armchair opinionator permalink
    October 17, 2013 1:29 am

    The Tea Party branch of the Republican party is doing exactly what its constituency sent it to Washington to do: (try) to decrease the ever-expanding size of government.

    The tea party is a very small minority of loony fundies, 18% of the population have kidnapped their own conservative party and are holding the other 82% to ransom. The consituency that the teabags represent is a minority of ignorant racists and religious zealots.

    http://www.truth-out.org/buzzflash/commentary/item/18240-just-18-percent-of-the-american-population-is-extorting-the-us-government

    Lizza comments on the current hostage taking by this minority within an actual minority within the population (the GOP control of the House is due to a gerrymandered anomaly going back to the 2010 “wave” election):

    …That’s not a democracy; it’s governance by thugs and terrorists.

    Look how this country went feral over a minority greens influence in a hung parliament and then compare the same paltry numbers of teabaggers in the US who think they can shut the entire country down to please a handful of crazies.

  62. armchair opinionator permalink
    October 17, 2013 2:02 am

    some more stats and demographics on teabag minority

    http://www.newyorker.com/online/blogs/comment/2013/09/meadows-boehner-defund-obamacare-suicide-caucus-geography.html

    The Teabags were assisted by FreedomWorks, one of their many Big Tobacco funded front groups.

    http://www.sourcewatch.org/index.php/FreedomWorks

  63. Ol' Sancty permalink
    October 17, 2013 1:50 pm

    The tea party is a very small minority of loony fundies, 18% of the population have kidnapped their own conservative party and are holding the other 82% to ransom. The consituency that the teabags represent is a minority of ignorant racists and religious zealots.

    A comment worth bookmarking.

  64. public toilet permalink
    October 18, 2013 8:21 am

    Scheming & lurking…

  65. public toilet permalink
    October 18, 2013 8:25 am

    And the winner, in the eyes of the broader global population, isn’t…the Teabags’ Republican Circus.

    Yay for ideological extremist ransom!

  66. public toilet permalink
    October 18, 2013 8:32 am

    For a moment of hilarity, type “teabagger” into the search bar of Urban Dictionary. 😆

  67. IPA permalink
    October 18, 2013 10:54 am

    Why do stoopid Teebaggers hate a “safety net for health”?

  68. public toilet permalink
    October 18, 2013 11:30 am

    At a guess, probably because they thought that shitting in the conservative nest would be a great way of promulgating brand recognition?

    I’ll check out your links when I’m home.

    Now, go look up teabagger on UD.

  69. Splatterbottom permalink
    October 18, 2013 11:31 am

    You sound a little tired, TBoss. BTW, are those bags under your eyes?

  70. October 18, 2013 6:44 pm

    lt`s been a fun-filled couple of weeks watching the teabags arse-fcuk the rest of the conservatives in such a hard and very public way. Of course it is much better that the teabags did this to the repugs, instead of another party or group, as far as `retribution` goes. Now we just have to wait and see if the teabags are worth the trouble to the rest of the repugs to keep em or toss em. Or have things already gone too far, and changed too much, that the repugs will now have to get inline with teabags from now on.

  71. October 19, 2013 11:32 am

    Apparently the current `funding-deal` will only last to about January,
    then, the Teabags get to bend the Repugs over again.

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