As the bedrock of the global economy, the US national debt consistently stands at the forefront of economic discussions. What if the unthinkable happened and the US defaulted on its debt?
Let’s delve into the potential aftermath, scrutinizing domestic and international economic and social ramifications, and assessing the probabilities and risk mitigation strategies of a US default.
The Domino Effect: Global Economic Havoc
A US default could set off a chain reaction, wreaking havoc on financial markets worldwide. With the US dollar as the global reserve currency, a default would likely lead to its devaluation. Consequently, international trade could face severe disruptions, as trust in the dollar falters and countries scramble to find alternative trading currencies.
Investors, fearing a collapse of the US bond market, might panic and pull funds from other markets, feeding the crisis. The knock-on effects could be felt across the…
