President Obama and Congress have failed to think of ideas to get us out of this debt crisis. Causing continued worries in our global market, with the dollar losing its value, United States stock declining and the value of gold, what is the investor suppose to invest in. Once considered the United States Safe haven the United States Treasuries has held steady for the past few weeks.The Treasury Department has said that the government must reach a deal by Aug. 2 or risk being unable to temporarily meet all its obligations like interest payments on debt, Social Security or paychecks to federal workers.
Few investors believe the United States will fail to commit on the debt crisis. but some are taking steps to reduce the risk of holding treasury bonds and angling on ways to make a profit as soon as possible. And even if a deal is reached in Washington, some in the industry fear that the debt crisis has already ruined and or harmed the country’s market credibility.
People have pointed out that past governments have neared the same crisis we are passing now without a global collapse. There is still some of the greatest anxiety in the markets is that investors will lose confidence in Treasuries and move toward selling them, which would drive their values down and raise the rates up.
Analyst have said that investors might sell some United States bonds to buy foreign bonds, or assets in Asia and emerging markets. The investors should be nervous about their assets because there has been this expectation that at some point, they’d come up with a deal, but given the failure this past weekend, I think that most people are losing confidence in our market system.
I hope investors now where to put their money, so they can save their money or make more off of it. I just hope this crisis is soon over
I have been told that in times of a good economy to invest in gold while the price is low, and when a recession hits, the gold prices will rise. But I have no idea what to do in this recession when our treasuries are now under a shadow of doubt. The idea I have is to cash in some of the favors we have done other countries. How about this: if I fought a war on your behalf and you are now rid of your tyrant or dictator, you forgive me any debts I may owe you, and we'll call it even? Because you know, we spend billions of dollars a week on some of your wars, so now you can actually come out ahead because we won't charge you for the cost of your war.
ReplyDeleteDarlene points out that other governments have neared the same crisis we now face without causing global collapse, but those other countries were not the only existing economic superpower in the world. The collapse of the American economy would definitely have major global repercussions. One can review the events of the biggest American bailout in US history and remember the rocking of the European and Asian markets as a result. This is potentially colossally bigger.
Overall, I agree with Darlene Ohabughiro regarding our mounting debt crisis and the negative effect it may have on our foreign investors. She seems knowledgeable about her subject matter. The picture is eye catching and there is a good flow to her blog. However, there are no imbedded links in which to find more information on the subject or to verify her statements. Also, there is no clear position in this blog and no suggested solution. Her questions do stimulate conversation, however, which led me to post this blog.
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ReplyDeleteDarlene Ohabughiro’s editorial on “What should the Investors do???” is taking an investors view on the United States debt crisis and is similar in some aspect to my own editorial. Darlene Ohabughiro’s editorial discusses on what investors are supposed to do while the Republicans and Democrats continue to play their little game of chess.
ReplyDeleteInvestors need to stay strong and continue to have faith in the United States government and here’s why. The possibility of a United States default is unimaginable to Investors. The reason being is because the United States owes a lot of money to foreign nations from the amount of U.S. Treasury bonds we have sold to finance our country. Countries like China for example which holds the largest amounts of U.S Treasury bonds would lose a large amount of money which could cause the world markets to tumble further if the United States also has a falling out.
Darlene Ohabughiro also discussed on what some investors were doing with United States treasury bonds in case the United States government doesn’t reach a deal on the debt ceiling. What investors are doing is selling off some of their bonds issued by the United States government, but when you talk about investing you have a high possibility of losing money which is why a lot of people lost a lot of their money in the 1930s with the Great Depression because there was a panic with the prices. The same concept applies to here as well. If the United States defaults on its loans then all those countries that we owe money lose money as well which will create panic like I said and cause a domino effect causing everyone to try and get as much money as they can back causing prices to fall which Darlene Ohabughiro addresses.
I’m no expert on economics but I do know that if investors lose faith in the United States government and start selling their holdings on bonds in mass quantities. Then we have a larger situation on hand not just with the United States but the world’s top economies. I like that Darlene Ohabughiro provides some key points on what investors are doing amidst this situation, but by saying that investor are losing more and more confidence in the United States is doubtful because the effects are too large. The world knows what happens when you lose confidence in a system all too well and will make sure that doesn't happen.