Mr Khan said:
The nice thing about bureaucracy in a time of crisis is that they almost always have contingency plans for every eventuality, so they are certainly considering the possibility (the bad thing about bureaucracy in non-crisis times is they make you adhere to a bunch of apparently silly rules to avert said worst-case-scenario). The Treasury Dept putting the message out there is likely trying to educate people on why default would be such a bad thing, to try and generate public awareness to force a solution. Catastrophic is an apt description, though. The global financial markets are underpinned by the stability of T-bills, and there's no other single financial institution with the ability to take the place of American treasury securities (Europe is still recovering, whilst among BRIC, Brazil and Russia are too untrustworthy, India's having big currency problems at the moment and China's system isn't built for such a major integration, aside from all the cooked books on China's asset sheet...). If American treasury securities go down, then the 2010s will be the 1930s redux and the clock on global economic integration will be set back 80 years. |
Which this guy would be super excited about.
Without the Bancour or something similar, he'd argue the kind of interconnectivity we have now only leads to greater instability.
