The US Debt Ceiling Crisis 2013 12

Good day forex traders and readers.

We last spoke of the US debt ceiling crisis back in 2011 which you can refer to If you are interested in what the US debt ceiling is.

In today’s article I will like to explore the impending 2013 debt crisis of the US. As far as the debt ceiling is concerned, the limit had been reached back in May. In view of that, the US treasury has been implementing extraordinary measures to keep the debt contained however it was reported that no more measures can be taken on October 17. This effectively means that the US government can no longer borrow anymore money come that day unless the US debt ceiling is raised.


We know that the implications from a stall in funding will result in far reaching impact to the economy. For example a lack of fund will delay interest payments on bonds issued by the US government. Such an action will create a loss in confidence towards the US government and financial system. This will have global implications and also increases the interest demanded for future loans sought by the US government due to the perceived additional risk. This will then increase the spending of the US government adding to it’s debt. In the meanwhile, risk aversion may strike the markets too causing riskier assets such as equities to fall in value creating a spiral of financial recede.

It is in the best interest of all that the impasse gets resolved as soon as possible because it was observed previously that the markets often penalize eleventh hour decisions. It was reported that Goldman Sachs economists estimated that should the US government fail to reach a solution, a fiscal pullback equivalent to 9% of the GDP may occur.

Will the US debt ceiling be raised in time or are we going to see the first ever default of the US government? Tell me what you think in the comments section below.

Trade safely.

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  • ιωαννης σαχας

    thinking about going long usd-jpy with a hedge gbp -usd….2 week trade..thoughts?

    • JustaStudent

      I have been long the yen for a while (carry hurts a little). Looking for retails sales to be horrible this holiday season for USD and the Nikkei to unwind to roughly 12,000 which are both bearish events for USD/JPY and could possibly see sub 90 for USD/JPY. The yen has some major problems, all of the deflation is coming from imports and they’re actually experiencing core inflation. You can see the yen picking up strength and momentum across the board, mainly the GBP/JPY. Plus retail traders are almost 3:1 long USD/JPY and with just standard market forces this would be close to a good time to bring that back to balance. The Pound has solid fundamentals and we could see 1.7 for GBP/USD in the coming months, but I think it is retracing from the run up at 1.48. I’m one person and haven’t been trading long at all but maybe these thoughts can help you in your research.
      GLGT – Joe

      • Sandy

        Thanks for the views 🙂

      • ιωαννης σαχας

        THANKS FOR YOUR EFFORT AND TIME….but i am playing smaller time frames….went long on 96,75 fibo ….debt ceiling crap should be over in a while… most analysts ,i am hoping for a retest of 100… there will be a shot until december….actually jpy and chf are the only major currencies ,which will lose value to usd….gbp is a currency i really dont like, and i dont perform well on it…. i mean , i think they ve put the dust under the carpet but market seems to be in a frenzy….(lost like 160 pips in eur-gbp , 2 trades)

  • Elmar Silveira Votri

    Nice article friend.

    My fundamental point of view is weak but I believe that increase US debt ceiling is like have a stop loss for a trade and moments before got is hit you rise your stop loss and keep doing this until you have a big and uncontrollable loss. Isn´t it?

    The image of the piggy going under water comes in handy! hehehe

    Thank you this very useful article friend!

    • Interesting comparison. So the advice here is we need proper money management :p

  • JustaStudent

    I would have to believe that an 11th hour deal will be reached. This is a REPUBLICAN issue, the ECONOMY. Seems silly that they would risk economic stability over a healthcare issue that was voted into law and deemed constitutional. I understand the need to reign in spending but I believe better negotiating tactics could be executed. I’m independent and would criticize the Democrats if they ever attempted a maneuver this self-serving. But all in all, a deal will get done with some Affordable Health Care Act contingencies. One amateur’s perspective, be happy to learn where I’m wrong in my beliefs/statements.

    • I guess one just have to hope the shut down ends soon mate !

      • Citizen Soldier


  • Louisa

    Thanks for the warning. This is what I love about you folks. A website that cares. Not one of the other 100000000000 forex sites out there 🙂