Should We Be Worried About a U.S. Debt Default?

While the stock markets so far have reacted mildly to the government shutdown , the looming Washington fight over the need to raise the federal debt ceiling could lead to a U.S. debt default . And that, everyone agrees, would trigger a much more pronounced reaction from Wall Street.

While the stock markets so far have reacted mildly to the government shutdown, the looming Washington fight over the need to raise the federal debt ceiling could lead to a U.S. debt default.

And that, everyone agrees, would trigger a much more pronounced reaction from Wall Street.

Unless Congress raises the U.S. debt ceiling by Oct. 17, the country will be unable to borrow any more money to pay its bills - including the interest on the $16.7 trillion it's already borrowed.

That would result in a U.S. debt default that would torpedo the nation's credit rating and send markets tumbling.

The question investors are trying to answer is whether Congress is so dysfunctional at this point that it actually allow something as destructive as a U.S. debt default to happen.

Money Morning Capital Wave Strategist Shah Gilani went on the FOX Business program "Varney & Co." on Tuesday to offer his view on how the debt ceiling fight will play out, and what investors should keep an eye on.

 


Note: Nothing goes up forever. Not the Federal Reserve's balance sheet, not debt levels, and not stock markets... even when there isn't a government shutdown or U.S. debt default looming. Here Shah Gilani tells you how to prepare for the eventual correction (or possible crash), and - more importantly - how to make money from it...

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