Discussing with my friends most people think that the US will not default, it’s almost like they cannot believe it will happen. “It’s too big”.
The bigger they are, the hard they fall. My opinion, they will default, the dollar will drop in value and we will begin a new era.
I could be wrong though. I hope for the sake of the US I am but I cannot see how they will get out of the debt. You cannot continually get more and more debt, eventually the financial system will collapse.
Could it be that the Universal reserve currency will return to gold. India have already been paying for oil with Gold. The banks are now planning for the default. So am I.
To me buying Gold is the right thing to do at this stage against USD, although it has been bouncing up and down, Gold could recover back to highs from before the huge drop if the dollar fails.
I cannot believe the dovish attitude of people. If they have not gotten a deal yet, why will the get it now. I think the republicans want the default so that they can impeach Obama. The damage to the democrats, along with the dollar would be huge.
Note that those who have USD bonds may have insurance against losing the bonds in the event of a default, they may try to push for a default if the insurance payout would be greater than the return on the bond payments.