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3 Days Away From U.S. Debt Default And Global Financial Markets Chaos?

3 days from chaos? ….nobody really believes on this… as dollar trade unexpectedly stable…

Asian shares: Japan's Nikkei close, Hong Kong's Hang Seng close, Korea's Kospi -0.23%, Australia's ASX 200 -0.43% and China's Shanghai 0.43%.

IMF chief Christine Lagarde warned of "massive disruption" to the global economy if the U.S. debt ceiling, which will be reached on Thursday, was not lifted. That is when the U.S. Treasury runs out of authority to borrow money. "We would be at risk of tipping, yet again, into recession," Lagarde said in an interview.

World Bank head Jim Yong Kim warns US is 'five days away from a very dangerous moment' because of the government's borrowing crisis. The president of the World Bank on Saturday warned the United States was just 'days away' from causing a global economic disaster unless politicians come up with a plan to raise the nation's debt limit and avoid default. 'We're now five days away from a very dangerous moment. I urge U.S. policymakers to quickly come to a resolution before they reach the debt ceiling deadline...Inaction could result in interest rates rising, confidence falling and growth slowing,' 'If this comes to pass, it could be a disastrous event for the developing world, and that will in turn greatly hurt developed economies as well,'

U.S. risks joining 1933 Germany in pantheon of deadbeat defaults. Reneging on its debt obligations would make the U.S. the first major Western government to default since Nazi Germany 80 years ago. Germany unilaterally ceased payments on long-term borrowings on May 6, 1933, three months after Adolf Hitler was installed as Chancellor. The default helped cement Hitler's power base following years of political instability as the Weimar Republic struggled with its crushing debts.

Senate leaders of both parties are negotiating to avert a U.S. default after a lapse in borrowing authority takes effect Oct. 17, even as senators block legislation to prevent one and talks between the White House and House Republicans have hit an impasse. Democratic lawmakers said Oct. 12 that the lack of movement may have an effect on financial markets. After Oct. 17, the U.S. will have $30 billion plus incoming revenue and would start missing payments sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.

Swiss National Bank President Thomas Jordan said the central bank's currency ceiling on the franc remains essential to protect the country's economy. "The minimum exchange rate is very important," Jordan said yesterday in Washington, where he attended the joint annual meetings of the International Monetary Fund and the World Bank. "It remains a crucial tool of our monetary policy in order to avoid a tightening of monetary conditions in Switzerland." The Zurich-based SNB implemented the cap of 1.20 per euro in September 2011 after the franc came close to parity with the bloc's currency.

Schaeuble sees new German government by mid-November.

China's consumer prices rose more than estimated in September, while a decline in factory-gate prices eased. The consumer price index rose 3.1 percent from a year earlier.

Watch today: EU industrial production.

By Zulutrade

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