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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

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To: Metacomet who wrote (76495)	7/21/2011 8:42:29 AM
From: Metacomet	Read Replies (1) of 220055

If the Crisis Continues for Some Time However — and it’s an important “however” — if a U.S. default continues for any substantial length of time, nobody will escape the consequences, Canadians least of all. The U.S. government is the largest purchaser of goods and services on the planet. If it abruptly ceases paying for its purchasers, the shock will cascade through the global economy. If the U.S. government does not pay its suppliers, those suppliers won’t be able to pay suppliers of their own — some of them located in Canada [not to mention elsewhere in the world] – which could trigger supplier defaults on their financial obligations sparking another U.S. and international banking crisis.. If unpaid U.S. government suppliers lay off workers, those workers must cut back on their own purchases, including purchases from Canada [and elsewhere in the world]. If the cutback in U.S. government activity slows overall U.S. economic growth (already slowed by the rise in energy prices this year), it’s hard to see how Canada [and the rest of the world] does not feel the pain of the slowdown. Canadian exports [75% of which go to the U.S.] to the United States rose 22% in 2010 over the depressed levels of 2009 but a shock in 2011 could stop that progress… Divided government in the United States is always a rough-and-tumble business. The Republicans who control the House of Representatives want less spending and taxing than does Barack Obama. Arriving at a compromise between the two parties was never going to be easy but the Republican decision to use the threat of default to get their way in negotiations escalated the confrontation in ways rarely before seen in U.S. history. The Republican decision to deploy this terrible threat has pushed the United States — and the world economy — toward a fearsome shock at a time when the world economy cannot afford any more shocks. munknee.com

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