Entering the first day of May, US Finance Minister Yellen reminded the US Congress very seriously that if Congress has been dragging on, the federal government may exhaust its funds on June 1, causing an unprecedented U.S. governmentDebt defaults, the consequences will be unimaginable.
This remark not only makes the United States, but also makes the world feel uneasy.
The US Federal Government hit a legal debt limit of US $ 3.1.4 trillion (approximately S $ 41.7 trillion) as early as January this year.Can cope with it for a while.
In the past 10 years, raising the debt limit has always been a political issue for the United States to play with each other and bargain.President Biden asked the Republican Party to raise the debt limit, but the Republicans of the House of Representatives said that if they did not reduce government expenses to reach a broader agreement, they would not agree with this.The Speaker of the House of Representatives McCarthy promoted a Republican proposal in the House of Representatives last month to linked the upper limit of debt with the comprehensive reduction of expenses, but this bill cannot be passed in the Senate, which is controlled by the Democratic Party.
Analysts pointed out that raising or suspending debt limit is the unique policy of the United States. It has long been just a form for a long time, because the decisions of public debt and state expenditure are finalized in other procedures.However, during Obama's presidency, Republicans began to adopt a tougher route to try to use Congress's voting rights to increase debt limit as political chips.When the Obama was president in 2011, the US government was almost a debt defaults. Congress did not agree to raise the debt limit until two days before the debt default expires. Although the U.S. Treasury credit rating was relegated.
But this year's situation is a bit different.Investors have recently sold US debts that have expired in three months, and invested in US debt in January, showing that the market believes that the government's possibility of unable to pay debts on time from June and July has increased.The cost of providing default insurance for US government debt has soared to the highest level since the financial crisis from 2008 to 2009, showing that investors are taking risks seriously.
In this regard, Brian, an analyst at DRW Trading, a trading company, pointed out that he personally does not think that many people in the market will bet on breach of contract.The possibility is not zero, and the possibility that the possibility of a certain financing problem cannot be prevented in time. The market has considered this possibility. "
Over the years, the United States two parties have fallen into a deadlock on improving the issue of debt, but in the end, it has not caused a large market turmoil.Will the United States pass peacefully this time?
Singapore Strategy and Policy Department Senior Visit Researcher Cai Dao Aluminum was interviewed by Lianhe Morning Post.They have no money), and then they decide whether to limit the government's loan quota."MPs of Congress used this system of the US government as a bargaining tool. I think they will reach an agreement sooner or later, but this is undoubtedly playing fire."
Han Wei, manager of Huili Securities Investment Group, accepted an interview with Lianhe Morning Post, saying that if the United States wants to pass the level smoothly to increase debt, there may be many twists and turns in the middle."My personal prediction is probably before the two parties reach an agreement, and the US government will really stop for a period of time. Because the differences between the current two parties are huge, its gap is not easy to reach compromise. But investors don't have to worry too much.For more than a month, the market has not collapsed. "
At present, investors and markets are very worried that the United States, as the world's largest economy, has an impact on the global economy once its finances and economy have problems?
Cai Dao Aluminum said that the United States is now facing many serious economic problems. In addition to potential government bond issues, it also includes high inflation and the banking crisis, so everyone is worried."To solve these problems, it is necessary to carry out major structural reforms and bear short -term economic pain that may occur. However, I am not sure that the US government can successfully implement these reforms."
Cai Dao Aluminum reminded: "Once the US government cannot repay debts, it will be disaster for the US economy and other parts of the world. Once the crisis of breach of contract broke out is enough to trigger the global financial crisis, because many banks, insurance companies and pension fundsHolding these bonds. This crisis will definitely be serious than the financial crisis from 2008 to 2009. "
Han Wei believes that in the short term, party politics may indeed drag the domestic economy to a certain extent, especially when the current market environment is not good, the global economy and even the stock market may be affected.However, Han Wei believes that the impact may be relatively limited, and the possibility of dragging down the US and the global economy is very small. "Because the two parties in the United States started in the constitutional meeting, a complete restraint mechanism was formed in the more than 200 years of party struggle., So that party disputes will not have catastrophic consequences. "
Han Wei pointed out that for Singapore, if the global economy is turbulent, it will highlight the stability of the local economy, which may attract more people and high net worth people to flow into the local area and drive the local economy.
Another problem that the market pays attention to is that the United States has continuously raised interest rates to cope with domestic high inflation, which has caused increasing pressure on other countries around the world.Recently, the trend of going to the US dollar is becoming increasingly obvious. How will this crisis affect the sustainability of the US dollar hegemony?
Cai Dao Aluminum said that the last year when the United States enjoys fiscal surplus was in 2001.During the period of the crown disease and the past 20 years, the advantage of the US dollar hegemony allows the United States to bond a large amount of debt at ultra -low interest rates."Being able to grow debt for 20 years must be supported by certain beliefs. Investors believe that the US government has the ability to repay debts in the future. Otherwise, how can the US government accumulate so huge and account for 120 % of its domestic GDP (GDP)Debt? "
