now the U.S. economy is so fragile, we will soon no time … … to solve the problem of power in our hands, as long as a vote, we can end it all. – U.S. President Barack Obama
7 31, the U.S. Senate Democratic Leader Harry Reid at a news conference, according to media reported that the U.S. debt ceiling to improve the two parties close to agreement on the issue.
worse is the fact that the president six months ago. to a blank check, now he wants one, it is simply impossible. – Republican House Speaker John Boehner
comprehensive local media Xinhua News Agency Xinhua reported on July 31, the United States in raising the debt ceiling between the two parties close to agreement on the issue, in order to avoid occurrence of the U.S. Government debt default. Leaders of both parties the morning of July 31, members of Congress will the latest notice, in preparation for the next vote.
probability of default significantly decreased
Senate Minority Leader Republican Mitch McConnell morning interview with CNN, said: “We have very close reach an agreement. “Democratic Senator Charles Schumer said the agreement is expected to reach, the possibility of default decreased significantly, but still a lot to discuss.
still in the White House and Republican leaders to discuss the new program will raise the debt ceiling in two steps of about $ 2.4 trillion within a decade to reduce the amount slightly larger than the size of the deficit. In the first step, will immediately increase the debt ceiling $ 1 trillion in the second step will further increase later this year. The program calls for Congress to balance the government budget constitutional amendment vote. But the two have no debt ceiling increase approved by Congress. Programs also require the establishment of a bipartisan special committee of the number of each half, to oversee finances.
several new programs have been closed
Senate is scheduled for the afternoon of July 31, the program held a procedural vote. If the program was adopted, but also hold the final vote, then returned to the House of Representatives to vote. If this program can be approved by both houses of Congress before the President for Barack Obama signed into law, the U.S. government debt from default.
as of press time reporter, news shows, can vote by both houses, there are still uncertainties.
U.S. Treasury data show that the U.S. federal government on May 16 this year has exceeded $ 14.29 trillion statutory debt limit, if Congress does not increase in the August 2 debt ceiling, the U.S. government will face a breach of contract risk. Analysts generally expect the U.S. will reach a bipartisan compromise in the last minute to avoid breach of contract against the very tough U.S. economy.
other economies is affected by
breach of contract if the United States, will lead to global financial turmoil, global bond and stock markets will be huge volatility. In addition, the dollar will collapse, may result oil and other commodities priced in U.S. dollars price spikes, and then to other economies, resulting in larger pressure of imported inflation.
Lagarde, president of the International Monetary Fund recently warned that the U.S. debt default or credit rating was lowered to cause very serious consequences, the impact of U.S. and global economies, and the dollar as the world’s main reserve currency status will be questioned.
“China has lost patience with the United States”
British media said, as the world’s largest holders of U.S. Treasuries, China is pressuring the United States
British “The Independent” reported on July 30, as the world’s largest holders of U.S. bonds China, ” China has lost patience with the United States “, further to which pressure the U.S. to solve its sovereign debt problems.
“The Independent” in this view from the Xinhua News Agency published a commentary. The newspaper quoted this comment that the U.S. debt ceiling issues in the political bickering, is “老鹰捉小鸡” approach kidnapped around the world. And if American politicians can not be before Tuesday’s deadline to reach agreement, then many countries will be affected, the impact on China will be particularly severe. It is reported that China’s $ 3.2 trillion $ 1.2 trillion foreign exchange reserves in U.S. bonds.
Americas head of research at Standard Chartered Bank, said Mann, the past six years, China has been working to achieve diversification of foreign exchange reserves, but many sought to hold U.S. Treasuries. Mann said that while China holds a total of U.S. sovereign debt is still increasing, but China is also actively buying overseas assets, reduce the proportion of U.S. government bonds.
many economists say, because the current U.S. debt ceiling issue, China will adjust the structure of foreign exchange reserves, reducing holdings of U.S. bonds and the rate of U.S. assets may be accelerated. (Wan Ka)
the worst year on Wall Street suffered one week
the U.S. market panic is increasing debt default, analysts recommend the suspension of all investment
power market, according to Xinhua News Agency on growing concerns about the U.S. debt default, Wall Street suffered the worst of this year to a week.
on July 25 to July 29, five days, the Wall Street investor confidence decreased, fear is increasing. The week, blue-chip Dow Jones index and S & P 500 index fell for five consecutive trading days, the highest year to its biggest weekly decline. The market panic index rose 9% within a week. New York crude oil prices also rose after the first four weeks of decline. New York Mercantile Exchange, the traders card, said: “Once a debt default, the market impact will not be able to imagine.” He said that the current market risk aversion is very serious. Rochdale Securities analyst Tatsuo also advised investors to suspend all investments, because all stocks may decline.
the week, including Goldman Sachs, president of Wall Street executives, including 14 joint letter to U.S. President Barack Obama and members of Congress, would raise the debt limit as soon as possible an agreement. The letter said that if the U.S. debt default or rating downgrade, will hit business and investor confidence, the impact of stock and bond markets, so that has troubled the U.S. economy worse.
across the Atlantic is not peace
power across the Atlantic, according to the Xinhua News Agency Europe, which lasted a year and a half sovereign debt crisis continues, and continue to set off new waves.
Although the euro zone leaders recently issued a second round of the Greek rescue package, and decided to further increase the response to the crisis “fire”, but further to the outside world for crisis, both Italy and Spain a large euro-zone countries, but lingering concerns about the spread. Analysts pointed out that, due to Greece’s new aid program implementation and its consequences still uncertainty, coupled with the debt crisis in Europe led to deep-seated reasons still exist for some time in Europe is still difficult to calm, the debt crisis Waves of possibility still exists.
2009 year-end, the situation is most severe debt crisis in Greece take the lead, thus beginning the prelude to the euro zone sovereign debt crisis. Despite EU bailout, but the Greek struggling more than a year after the debt default or escape the bad luck, fear will be the first occurrence of the euro-zone countries of sovereign default. In the meantime, Ireland and Portugal have also fallen.
● What is the U.S. government debt ceiling?
U.S. government legally binding debt ceiling, debt is a means to maintain government spending. The current debt ceiling of $ 14.3 billion total. In May, the U.S. debt has broken through to the ceiling.
● why the U.S. government can not borrow more money?
this is not a government authority. Debt limit prescribed by law, the relevant Act can only be made by Congress. In 1917, Congress first proposed the government debt limit. Since then, the debt ceiling has been raised many times. In addition, the U.S. Congress has limited the government’s spending and taxation powers.
● why the bias current debt problems?
financial crisis and the fragile U.S. economy triggered a sharp rise in government spending, economic recession, the tax is also not good. Spending more, earning less making the government deficit increased significantly. Republicans control the House of Representatives claims the deficit under control, which led to both parties in Congress debating on the debt ceiling.
● U.S. debt default and the Chinese ware?
as the world’s largest economy, the United States by the debt default or downgrade, will hit the U.S. economic recovery, and then transfer to other economies. China is the world’s largest holders of U.S. bonds, foreign exchange reserves are about one-third of U.S. Treasuries. So if the U.S. debt problems, a great impact on China. (Sheet music)
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