Early Warning Signs of the Looming Global Financial Crisis- Part 4
Posted: 07.22.2011 at 9:00 AM
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So, what about the us?  While the financial situation in the U.S. varies greatly with Greece and China, we will face results remarkably similar.  The biggest issue we face right now is the debt ceiling debate, which is putting Republicans and Democrats on opposite sides of the fence.  The most likely outcome won’t lead to a crisis this year, but rather a patchy compromise between both sides that will kick the hard work down the road into the post-election period.  Regardless of the outcome of the election, the Federal Reserve will be forced to reduce its balance sheet and raise interest rates by 2013, which is when global bond markets will really pressure the U.S. to come up with a plan for reducing its budget over the long term.