US Treasury concerns about a possible USA default

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There are concerns from the US Treasury and others about the possibility of a US default:

October 6, 2013

Congress needs to pass a debt ceiling increase by Oct. 17 or the U.S. will default, said Treasury Secretary Jacob J. Lew.

“Congress is playing with fire,” Lew said on CNN’s “State of the Union” today. “If the United States government, for the first time in its history, chooses not to pay its bills on time, we will be in default, there is no option that prevents us from being in default if we don’t have enough cash to pay our bills…Even getting close to the line is dangerous.” http://www.bloomberg.com/news/2013-10-06/u-s-to-default-if-debt-ceiling-not-raised-lew-says.html

A Treasury Department report says a default could freeze credit markets, devalue the dollar, send interest rates higher and possibly cause another recession.

That would drive international investors away from the U.S., according to economist Stan Collender. “All they know is, this solid rock of an economy, solid rock of a political system, seems to be shaking. And that has got to drop your confidence. It means that, if they are counting on the money to be repaid at the right time also, they may just say, ‘You know what, it is not worth the risk,’” said Collender.

To avoid a calamity, Congress needs to agree to raise the nation’s debt ceiling. House Speaker John Boehner and other Republicans are demanding concessions from Democrats on spending and health care first.

“I do not believe that we should default on our debt. It is not good for our country. But after 55 years of spending more than what you bring in, something ought to be addressed,” said Boehner.

Obama says he will not even discuss it. “There will be no negotiations over this. The American people are not pawns in some political game.”

The damage from a default could last a long time, said Joseph Minarik at the Committee for Economic Development. “In all likelihood, that will affect the esteem with which lenders perceive the U.S. Treasury for a very long period of time. Trust, once it is lost, is very hard to regain.”

Minarik and others are urging the nation’s leaders to avert a crisis. “Don’t do this,” he said. http://www.voanews.com/content/us-debt-crisis-likely-to-hurt-world-lenders-borrowers-investors/1763491.html

Here is some of what the report from the US Treasury (referred to above) actually says:

The United States has never defaulted on its obligations, and the U. S. dollar and Treasury securities are at the center of the international financial system. A default would be unprecedented and has the potential to be catastrophic: credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.

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Political brinksmanship that engendgers even the prospect of a default can be disruptive to financial markets and American businesses and families…

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We may be starting to see some tentative signs that the current debate is affecting financial markets . Although the price moves are small and could easily reverse quickly, the fact that yields on Treasury bills that mature at the end of October are higher than bills that mature immediately before or after, might suggest nascent concern s about possible de lays in payments on those bills. I f market participants were to lose confidence in the United States’ willingness to repay its debts, the adverse effects seen in 2011 c ould reappear , and even push up yields on Treasury securities. Such a rise in Treasury yields would also raise the cost of financing the government’s debt and worsen the fiscal position of the government.

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In the event that a debt limit impasse were to lead to a default, it could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth — with many private – sector analysts believing that it would lead to events of the magnitude of late 2008 or worse, and the result then was a recession more severe than any seen since the Great Depression. Considering the experience of countries around that world that have defaulted on their debt , not only might the economic consequences of default be profound, those consequences , including high interest rates, reduced investment, higher debt payments, and slow economic growth, could last for more than a generation.

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The politicians in Washington, D.C. are playing a dangerous game. If there was an actual default, interest rates would go up, the debt would go up, the USA would likely implement steps that would further increase its money supply, and the ramifications in the long run would be even worse. At some point in time, the USA will likely start to experience massive inflation (which is something that the politicians should realize). And afterwards, its creditors will rise up (Habakkuk 2:7; see also What a USA default could look like; what did Habakkuk warn?).

As far as certain leaders go, notice that the Bible teaches the following:

12…Those who lead you cause you to err, And destroy the way of your paths.” (Isaiah 3:12)

16 For the leaders of this people cause them to err, And those who are led by them are destroyed (Isaiah 9:16).

43 The alien who is among you shall rise higher and higher above you, and you shall come down lower and lower. 44 He shall lend to you, but you shall not lend to him; he shall be the head, and you shall be the tail. 45 Moreover all these curses shall come upon you and pursue and overtake you, until you are destroyed because you did not obey the voice of the LORD your God, to keep His commandments and His statutes which He commanded you…47 “Because you did not serve the LORD your God with joy and gladness of heart, for the abundance of everything, 48 therefore you shall serve your enemies, whom the LORD will send against you, in hunger, in thirst, in nakedness, and in need of everything; and He will put a yoke of iron on your neck until He has destroyed you. 49 The LORD will bring a nation against you from afar, from the end of the earth, as swift as the eagle flies, a nation whose language you will not understand, 50 a nation of fierce countenance, which does not respect the elderly nor show favor to the young. 51 And they shall eat the increase of your livestock and the produce of your land, until you are destroyed; they shall not leave you grain or new wine or oil, or the increase of your cattle or the offspring of your flocks, until they have destroyed you. 52 They shall besiege you at all your gates until your high and fortified walls, in which you trust, come down throughout all your land; and they shall besiege you at all your gates throughout all your land which the LORD your God has given you (Deuteronomy 28:42-45,47-52)

Now, I do not believe that the USA will be destroyed this year in fulfillment of the prophecies of Deuteronomy 28:47-52. Actually, I do not believe that it can happen until after the end of the second Obama term (see also the video The Great Tribulation Will Not Begin Before 2017).

But what the USA is doing does have major ramifications. More and more creditors are attempting to figure out how to decouple themselves from their dependance upon the USA dollar. International confederations such as the European Union and the Eurasian Union, as well as some of the Gulf States and China (and others) are actively attempting to decrease the world’s dependance on the USA dollar for international trade. When the USA dollar loses its dominance in international trade, that too will be inflationary (the price of many goods would likely go up substantially).

The USA keeps playing this dangerous game, even though the Obama Administration’s own Treasury Department is seeing some of its dangers. These repeated budget ‘crises’ and possible defaults have a cost, and the cost ultimately will exceed what even the Treasury Department is warning of.

Some items of possibly related interest may include:

Will the Anglo-Nations be Divided and Have People Taken as Slaves? Will the lands of the United States, United Kingdom, Canada, Australia, and New Zealand be divided? What about Jerusalem? What does Bible prophecy teach? Are there non-biblical prophecies that support this idea? Who will divide those lands? Who will end up with the lands and the people? Here is a link to a video titled Will the USA and other Anglo-nations be Divided and Their People Made Slaves?
Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, British, Scottish, Welsh, Australians, Anglo-Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? What will happen to the Jews in Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo nations? Why might God allow them to be punished first?
Who is the King of the West? Why is there no End-Time King of the West in Bible Prophecy? Is the United States the King of the West?
Does God Have a 6,000 Year Plan? What Year Does the 6,000 Years End? Was a 6000 year time allowed for humans to rule followed by a literal thousand year reign of Christ on Earth taught by the early Christians? Does God have 7,000 year plan? What year may the six thousand years of human rule end? When will Jesus return? 2021 or 20xx? There is also a video titled The 6000 Year Plan: Is the end of humanity’s reign almost up?
When Will the Great Tribulation Begin? 2013, 2014, or 2015? Can the Great Tribulation begin today? What happens before the Great Tribulation in the “beginning of sorrows”? What happens in the Great Tribulation and the Day of the Lord? Is this the time of the Gentiles? When is the earliest that the Great Tribulation can begin? What is the Day of the Lord? Who are the 144,000? Here is a version of the article in the Spanish language: ¿Puede comenzar la Gran Tribulación en 2013 o 2014? ¿Es el Tiempo de los Gentiles? You can also see the English language video The Great Tribulation Will Not Begin Before 2017.
Who is the King of the West? Why is there no Final End-Time King of the West in Bible Prophecy? Is the United States the King of the West? Here is a version in the Spanish language: ¿Quién es el Rey del Occidente? ¿Por qué no hay un Rey del Occidente en la profecía del tiempo del fin?
Who is the King of the North? Is there one? Do biblical and Roman Catholic prophecies for the Great Monarch point to the same leader? Should he be followed? Who will be the King of the North discussed in Daniel 11? Is a nuclear attack prophesied to happen to the English-speaking peoples of the United States, Great Britain, Canada, Australia, and New Zealand? When do the 1335 days, 1290 days, and 1260 days (the time, times, and half a time) of Daniel 12 begin? When does the Bible show that economic collapse will affect the United States? Here is a link to a video titled: The Future King of the North.
Barack Obama, Prophecy, and the Destruction of the United States-Second Edition for Second Obama Term This is a 160 page book for people truly interested in prophecies related to Barack Obama and the United States, including learning about many that have already been fulfilled (which the book documents in detail) and those that will be fulfilled in the future. It also has a chapter about a Republican choice. This book is available to order at www.barackobamaprophecy.com. The physical book can also be purchased at Amazon from the following link: Barack Obama, Prophecy, and the Destruction of the United States: Is Barack Obama Fulfilling Biblical, Islamic Catholic, Kenyan, and other America-Related Prophecies? What About Republican Leaders? Second Edition for Second Obama Term.
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