US Debt Deal Agreed
Published / Last Updated on 31/07/2011
US Debt Deal Agreed.
The United States Republic and Democrat leaders have agreed on raising the US debt limit and in doing so have avoided a global meltdown. This still has to be voted through in Congress.
Should the deal not be approved, the US will technically have defaulted on its debt in 2 days. The move should settle global markets although we do not believe it will necessarily avoid the US having its credit rating down valued from AAA.
As part of the agreed increase in debt level above $14.3 trillion, Obama has agreed a program of cutting US spending by $1 trillion over the next 10 years.
It is anticipated that markets will rise globally over the next 24 hours, although we suggest this has only masked the problem rather than solved it.
Until western nations agree spending cuts via tougher austerity measures, markets will remain volatile for the foreseeable future.