US Government

You’re an Ass… Look who’s talking!

republAs the U.S. Fiasco creeps towards the “Debt Ceiling” deadline, people around the globe are watching in disbelief as Republicans and Democrats in the U.S. act out a dangerous game of “Chicken.” This game basically tests who will flinch first.

The stakes are incalculable because the largest economy in the world has always paid its bills. The ripples throughout the system would be deep and possibly long-lasting. With that being said, most “experts” and professional traders do not believe that this will go to the cliff and that a last-minute deal will be made. Even now the main hurdles have been taken off the table in the form of debating the Affordable Care Act (more commonly referred to as Obama Care).

In one of the many polls, all designed to measure if a person will have a job after the next election, most politicians hit all time lows in approval ratings. By the way, as far as statistics, I warn people to always take these with a grain of salt (maybe not this one), as any number can be manipulated to bias the taker’s agenda (100% of the people who ate pickles in the year 1702 died, therefore pickles cause death).

The poll, taken by the Public Policy Polling Institute and reported by CNBC, reported that Americans had an 85% higher opinion of witches, hemorrhoids, and IRS_logocockroaches, than Congress. Included in the list were zombies and potholes in the road. Even the IRS (the U.S. Taxman) rated higher.

The good news is Congress rated higher than the serial killer, Charles Manson.

I have been asked a lot about what could happen, if the U.S. doesn’t get its act together and go back to work, as well as raise the debt ceiling. The main consensus is that we could see at least a 10% decline in the U.S. dollar, as the country would most likely lose its AA+ Credit rating. This might be a temporary phenomenon, as where else can or would money go? In addition, higher rates could be expected. In addition, this would likely affect the equity markets negatively.

As we approach the deadline, the market (at least the currency market) is telling us that this is baked into the pie or that nobody believes it will happen.

I think the most certain outcome is a change in who is doing the representation in Washington D.C., as people are fed up and frustrated with the politics. All this means is that nobody has won. In fact, we all lost. We lost a degree of confidence in the system, people lost income, and worst of all, the U.S. “lost face.”

 

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