Will the American government actually cross the debt limit line and risk a default on its debt? What exactly would that mean to all American and the rest of the world? Will a default be the catalyst to an all out economic collapse that many observers believe? Stay tuned.
In the meantime, bible prophecy warns that a time will come when the world will enter into a new global economic system which will be controlled by the Antichrist. God will judge this new system and destroy it during the latter part of the Tribulation, (Revelation 18).
The time has come! The day has arrived! Let not the buyer rejoice nor the seller grieve, for my wrath is on the whole crowd. Ezekiel NIV
They will throw their silver into the streets, and their gold will be treated as a thing unclean. Their silver and gold will not be able to deliver them in the day of the LORD's wrath. It will not satisfy their hunger or fill their stomachs, for it has caused them to stumble into sin. Ezekiel NIV
Debt doomsayer: Treasury forecasts ‘back to 2008 recession or worse’ if US defaults
government default caused by the ongoing budget standoff in the Congress could
have a "catastrophic” effect on the country’s economy, which would be felt
for decades, the Treasury Department said in report. The US government
went on partial shutdown this Monday after the Democratic-led Senate turned
down repeated efforts by the Republicans to pass a budget, constraining the
implementation of ‘Obamacare’ – a healthcare law, which the president considers
a centerpiece of his political legacy. If the Congress fails to raise the
$16.7 trillion federal borrowing limit by October 17, the government could
begin running out of money to pay its bills, which would result in an
debt default. US
Catastrophic Consequences of a
U.S. Default Explained
As we close out the first week of the government shutdown, a bigger and even more toxic disaster is creeping into the fray that could make the contentious budget battle look like a slap fight. The Treasury Department said Uncle Sam will be broke by October 17th unless something is done. Treasury secretary Jack Lew hammered home that point Thursday by releasing an unusually ominous statement that warned of catastrophic risks to the economy.
House Speaker John Boehner has said he won't let the government default on its debt, but until steps are taken to raise the nation's debt ceiling, the possibility of default is still theoretically alive. "If they seriously default on the debt, what we're really talking about is a depression," says veteran financial sector analyst Richard Bove, VP of research at Rafferty Capital Markets. In the attached video he explains how the fallout would be a lot worse than the recession suffered in 2008 and the aftershocks would be felt for at least a decade.
The Real Debt Ceiling
Most Americans do know the nation is $16.7 trillion in debt, but far fewer understand the implications of such debt. In fact, precious few Americans even know which nation underwrites more of our debt than any other. The overwhelming majority believes it is either
The overwhelming majority couldn’t be more wrong. The largest underwriter of U.S. debt is the United States of America, courtesy
of the Federal Reserve.
The Fed’s Keynesian-economics-on-steroids buying spree is called “Quantitative Easing” (QE). It consists of spending $85 billion per month, with no end in sight. Of that total, $40 billion is spent on mortgage-backed securities and $45 billion on longer-term Treasury securities.
Where does the Fed get the money to buy these securities? It “prints” money to buy them. To put this in household terms, the Fed is essentially paying down one credit card–by charging it to another credit card. During the Obama administration, QE, along with Congress spending additional revenue we don’t really have, has increased the national debt by an additional $6 trillion. QE has also debased the currency, since creating more currency makes each piece of currency worth less–on the way to becoming worthless.