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The US debt ceiling crisis

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Here is the news story that will dominate the news for the next few months, the next round of the US debt ceiling crisis.

 

http://news.yahoo.com/us-hit-debt-ceiling-mid-october-treasury-201320283.html

 

The US will hit its statutory debt ceiling in mid-October, raising the chance that the government will be forced to default on its debts, Treasury Secretary Jacob Lew said Monday

 

You may remember the previous debt ceiling crisis, how incredibly exciting that was.

 

http://en.wikipedia.org/wiki/United_States_debt-ceiling_crisis_of_2011

 

My predictions for the next few months.

The dollar index starts falling, we might see EURUSD go to 1.40 in the next month or so.

By mid October this story is the lead on every news report, everyone gets terribly excited. There are large arguments between the two sides of the Republocrats. Everyone on Toytown is worrying that the dollar is going to collapse. Deals are made, deadlines are pushed and extended, EURUSD makes a high somewhere between 1.45 and 1.5 by mid to late October. Everyone on Toytown tries to sell their dollars at the lowest possible price. Eventually a deal is secured, the ceiling is raised by 1.5 trillion dollars or whatever and everyone says that the problem has been solved. Then reports start coming out a little bit later saying that Spain (or Italy, France, Greece etc.) are struggling to make payments.

 

It is a rich and varied game... :rolleyes:

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