Winning Bizness Desk
Mumbai. There is a high possibility that the debt ceiling crisis in America will be averted as president Joe Biden and House Speaker McCarthy have nearly reached an agreement on raising the debt ceiling. Due to this, many nations of the world including India breathed a sigh of relief. However, this agreement has been given on the terms and conditions in this regard. But it has angered members of both the Democratic and Republican parties. So, experts predict that anything can still happen till the last moment. Many countries of the world, including India, can be hit by US default risk.
What about India ?
If we talk about India first then India has invested $224 billion in US government bonds. Hong Kong has invested 221 billion dollars, Brazil 217 billion dollars, Canada 215 billion dollars, France 189 billion dollars, Singapore 179 dollars. Other countries have also invested large sums in these government bonds. Meanwhile, the US Treasury Secretary Janet Yellen dropped the bombshell. Accordingly, if the government does not extend the debt period, the US will run out of cash on June 1. Therefore, there will be default in repayment of the loan. Debt settlement may occur. He explained that if the government helps, this time will not come. China and Japan are the largest investors in US government debt. Other countries have invested more than 7.6 trillion dollars in US government bonds. China alone accounts for a quarter of this. US Treasury bonds are considered the safest in the world.
American banks in trouble
Banks in America have been running on bad accounts for the past few months and big banks have given up. As these banks have gone bankrupt, the central government has received a big shock. As the banks collapsed, depositors withdrew more than one lakh crore dollars from the banks. Therefore, the situation of banks has become worse. India, China, Russia along with it are preparing to reduce the excess of dollars. The Indian rupee has taken a big lead.
If America declares bankruptcy...
If America declares bankruptcy, there will be dire consequences. According to White House economists, this would put 8.3 million American jobs at risk. The American stock market will suffer. The economic growth rate of the United States will collapse. There will be fear of economic recession. When America is in trouble, it will have repercussions around the world. A borrowing limit has been fixed. This limit has been raised 78 times since 1960. This limit was raised to $31.4 trillion in December 2021. So now only if this limit is increased and financial assistance is announced, this crisis can be averted.
