A Step-By-Step Guide to a U.S. Debt Default This week marks the deadline to raise the U.S. debt ceiling.

With the U.S. Congress still in negotiations, the consequences could be dire if the largest economy on earth can’t pay the bills.

The U.S. bridges the gap between money spent and taxes collected by selling Treasury bonds to investors, such as China. If the U.S. defaults, it would stop paying money it owed to these bond holders.

Without a deal, world markets could stumble into a recession because these bonds would lose value.

No one can say exactly what happens when the money runs out—but the uncertainty alone is harmful. Money is raised through tax receipts, but only to pay the interest on bonds already issued.

Learn more here: http://www.bbc.co.uk/news/business-24453400

By CWAN Global Press

The Canadian Wealth Advisors Network (CWAN) was established in March of 2009 as an online forum where investment professionals share ideas and best practices that allow them to meet the growing needs of their clients. As the CWAN community grew and evolved, it was expanded to serve both advisors and investors. Garnet O. Powell, MBA, CFA is the Editor-in-Chief of the Canadian Wealth Advisors Network (CWAN) magazine. He is an investment management professional with more than 20 years of experience. linkedin.com/in/garnetpowell

Leave a Reply

Your email address will not be published. Required fields are marked *

You have successfully subscribed to the newsletter

There was an error while trying to send your request. Please try again.

will use the information you provide on this form to be in touch with you and to provide updates and marketing.