All eyes on Fed.
Can they default now ?
It is the US government that is in debt not FED as in Federal Reserve, so US is the one that would default.Can they default now ?
Although it is not going to happen, they are just going to increase the debt ceiling sooner or later and keep on printing more money hence increasing the US national debt even more than the current $31.8 trillion.
(Ever since all this default talk began a couple of weeks ago the US national debt grew by about $200 billion lol).
Right now US regime is caught between choosing bad and worse.
- On one hand they should increase the debt ceiling and continue printing money to handle the massive budget deficit and the ridiculously high government expenses so that they can keep the sinking ship alive. But if they do that, it would worsen the inflation and FED would have to increase interest rates more while it is already too high and has caused recession in United States!
- On the other hand if they default on that debt, the whole US economy would crumble in a catastrophic way with markets crashing and most importantly the US dollar would tank. In a world where majority of countries are already dumping the dollar, USD tanking would forced them to speed up the dump and more countries would join the dumping party. This is while higher inflation and higher recession would overtake US.
This is why option #1 is going to be the less terrible choice...
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Situation look like de javu year of 2019 when the liquity was finished all around world.
The problem in 2019 wasn't liquidity, it was the economy that basically halted after the pandemic so they had to print money out of thin air and blow fake life into the dead economy. 