Goldman Sachs bank sounded the alarm – by its calculations, the U.S. Treasury will run out of money on June 8 or 9 in two and a half weeks. If they fail to raise the debt ceiling by then, America will be forced to declare a technical default.
Source: bluessoulfunk.com
And Goldman is already giving a 30% probability of default in the U.S.. This is substantially higher than Moody’s forecast of 10%. However, the bank still considers a rushed budget compromise this week or next to be the most likely scenario.
But some congressmen are already panicking that the point of no return has been passed and they may simply not technically have time to reach an agreement before the default deadline. The budget is still pending, although it has to be passed in the lower house this week and in the Senate next week. A delay of even 1-2 days could blow America into a financial cataclysm with default.
Participants of the G7 summit in Japan are joking – all American allies are used to political instability inside America. But at the same time the alarm is growing – what if the radical scenario with default really happens. And all holders of trillions of dollars’ worth of U.S. national debt will come under attack.
Meanwhile, the split in Congress is only getting worse. Left wing Democrats are demanding that Biden withdraw from the negotiations process – and personally raise the debt ceiling bypassing Congress. The right wing, on the other hand, is threatening to declare a vote of no confidence in speaker McCarthy if he makes too many concessions to Biden. It risks putting Washington in a real perfect storm situation – with political chaos on the back of a default and a new financial crisis.
Malek Dudakov
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