What if,……….

[S Landreth]

I was thinking, what if the US doesn’t raise its debt ceiling? What would happen? I own some stock and I was wondering would happen to it?

Here’s the answer/s I saw.

1) If the U.S. starts defaulting on its debt, everybody who owns U.S. stocks and bonds will take a big hit. This will affect the big banks, corporations and even countries -- pushing some toward bankruptcy. That's the kind of slide that can spark a panic. On a more personal note, your 401(k) and/or pension will suffer big losses. It could take a long time to rebuild those funds, delaying retirement -- or making it impossible.

2) Because the global banking system has such a big stake in U.S. assets and the dollar, it will essentially grind to a halt until the U.S. raises the debt limit. At that point, our usual ways of purchasing things -- including credit and loans -- will be unavailable. You can get and use cash, but it will essentially be Monopoly money for a while, due to hyperinflation.

3) With the global banking system in free-fall, nobody will be lending money for a while. You can't make big-ticket purchases (like a car or college education). And companies that have lost all their U.S. assets won't be able to get loans to cover their day-to-day operations if the commercial paper market -- where companies lend each other money overnight -- seizes up.

4) When businesses and corporations lose their money and can't get a loan to function, they have to cut somewhere -- and that somewhere could be you. In other cases, planned expansions and new hires might be pushed back, slowing down economic progress.

5) When the banking system does get back on track, it will still be more expensive and difficult for business owners, the government and regular people to borrow money or buy goods on credit. That drives up the cost of our debt, both personal and the one the government owns. When interest rates go up, the value of bonds you hold in your 401(k) goes down.

6) Treasury Secretary Tim Geithner warned congressional leaders that failure to raise the debt limit could stop, limit or delay military payments. "This would cause severe hardship to American families," he said, "and raise questions about our ability to defend our national security interests."

7) Those who rely on Social Security to pay their bills may well need to rely on family or government assistance (if it's still available) to get by. Social Security has a multi-trillion-dollar trust fund that ensures it will be able to pay out benefits for decades. But that trust fund is invested in special Treasury bonds, which will almost certainly plummet in value if the U.S. starts defaulting on other debts. The result could be a major cash crunch for seniors.

8) As the value of the dollar drops here in the U.S., it will become virtually worthless in other countries. If you're planning a vacation or business travel outside the U.S., it's going to get a lot more expensive.

9) If the federal government fails to pay the bills associated with Medicare, then hospitals, doctors and other medical service providers will not be paid. This could drive up the costs of health care -- and make it less available to those in need.

10) If the U.S. stops paying its bills, the rest of the world will get pretty upset. Even after debt repayment eventually restarts, China and Europe will be wary of lending more money to America -- and when they do, it will be at much higher rates.

Link: Debt Ceiling: What Happens If It Isn't Raised?

We got some guys here living with the help of their pensions and who might be living here with the help of Social Security. What do you guys intend to do (refer to 5, 6, 7 & 8)?

Some of you guys have parents back home. What will you do? Refer to 7 & 9.

Some of you guys are just visiting and maybe drawing money from a savings account back home. What will you do when that dollar becomes worthless? Refer to 8

[billy the kid]

which floor do you live on ?

[Cruiser]

I had my default currency switched to the €uro in my PayPal account since early 2010 suspecting its inevitable to do the wise thing sooner than later... although it was created back in 2003 with de USD$ as default... its time to switch ... and SCHNELL.....!!!

The €uros is becoming pals to the Yuan as well.... that is something one needs to be cautious about... can't give too much credit nor trust & confidence to counterfeits and Chinese copycat specialists can we???

Btw... be smart and swift and invest yr bucks like into Thailand soon B4 the bucks stops at yr front lawn!

[barbaro]

I was thinking, what if the US doesn’t raise its debt ceiling? What would happen? I own some stock and I was wondering would happen to it?

Don't worry.

It's a non-issue.

[Mr Earl]

^That's right. We're just seeing the same old political posturing taking place.
Obama is just getting his face rubbed the nasty mess he and his crew have made of things.

[S Landreth]

which floor do you live on ?

I am afraid she’ll toss me out to the curb if I don’t pull my own weight.

Where you staying? Any floor space available?

be smart and swift and invest yr bucks like into Thailand soon B4 the bucks stops at yr front lawn!

Shouldn’t be a problem then. I should be OK till the dust settles.

Don't worry.

It's a non-issue.

^That's right. We're just seeing the same old political posturing taking place.

Hope you both are right. You guys must sleep easy.

Obama is just getting his face rubbed the nasty mess he and his crew have made of things.

it takes time (and money) to clean up a mess

[Hampsha]

Many of us have nothing to worry about. A collapse of the US or sudden gain in the US still leaves us ...poor!

Life sucks! It might be time to smuggle drugs, smuggle illegals or hook up with some Nigerians.

[Rural Surin]

I was thinking, what if the US doesn’t raise its debt ceiling? What would happen? I own some stock and I was wondering would happen to it?

Don't worry.

It's a non-issue.

Yep. Why should it be?
The debt is nothing more than an illusion. So is the wealth. As is the existence.
No worries....just put it on the card.

[robuzo]

Really happy to be working for yen again. Just dumb luck. Also, every time I go past a gold shop and see 22,000 I wish I'd bought more at 8,600. . .

Interest rates going up in the States will drive the housing market even further into the quicksand. A crisis in the US will make things even worse in Europe, and who knows what will happen in China. If China takes a dive our Aussie buddies on here will be crying.

[S Landreth]

every time I go past a gold shop and see 22,000 I wish I'd bought more at 8,600. . .

I was watching some financial program the other day and they had some CEO of a large Gold mining company on. He said he believed the price would continue to rise (he gave some reasons), because all the gold mines have been discovered and no new mines would open to start a glut (in short). He might be right.

Seems like it would have been a great investment, looking back today.