The Last Time America Defaulted
There is chatter on the street this morning on a budget deal being worked out in Capitol Hill. I guess it is hard to ignore your Klout score for the GOP as the Obama administration uses the media advantageously to spread the panic. Like this one below.
“Reid, however categorized the debt ceiling issue as potentially “cataclysmic””
So we had USDJPY rise to a horrific 97.40 before plunging down on another news of a shoot out in the US capital (but that was 2am this morning). Apparently, a woman driver rammed her car into a police barricade.
The last time America had a default, it was a technical one back in 1979, on an administrative error. The last big one was in 1934 when their coffers ran out of gold to repay their obligations because America was short gold since 1890’s (now we know where the desire to sell gold came from).
There has been much noise about Clinton and Fort Knox tungsten “gold” bars that received some attention but faded away because no charges were brought.
It is tiresome that the markets are now well under the control of the market mafia again because America is really too big to fail, just like everyone of the G3. So buying credit protection is simply bullshit -who underwrites them ?
But if there is anything we will remember about this in 50 years ?
We will definitely remember the name of the President when it happened. It is natural and no one has forgotten after all these years that Roosevelt was the defaulter President who abolished the gold standard.
Maybe this is all Obama will ever be remembered for ?