What to do?

Darlene Ohabughiro’s editorial on “What should the Investors do???” is taking an investors view on the United States debt crisis and is similar in some aspect to my own editorial. Darlene Ohabughiro’s editorial discusses on what investors are supposed to do while the Republicans and Democrats continue to play their little game of chess.

Investors need to stay strong and continue to have faith in the United States government and here’s why. The possibility of a United States default is unimaginable to Investors. The reason being is because the United States owes a lot of money to foreign nations from the amount of U.S. Treasury bonds we have sold to finance our country. Countries like China for example which holds the largest amounts of U.S Treasury bonds would lose a large amount of money which could cause the world markets to tumble further if the United States also has a falling out.

Darlene Ohabughiro also discussed on what some investors were doing with United States treasury bonds in case the United States government doesn’t reach a deal on the debt ceiling. What investors are doing is selling off some of their bonds issued by the United States government, but when you talk about investing you have a high possibility of losing money which is why a lot of people lost a lot of their money in the 1930s with the Great Depression because there was a panic with the prices. The same concept applies to here as well. If the United States defaults on its loans then all those countries that we owe money lose money as well which will create panic like I said and cause a domino effect causing everyone to try and get as much money as they can back causing prices to fall which Darlene Ohabughiro addresses.

I’m no expert on economics but I do know that if investors lose faith in the United States government and start selling their holdings on bonds in mass quantities. Then we have a larger situation on hand not just with the United States but the world’s top economies. I like that Darlene Ohabughiro provides some key points on what investors are doing amidst this situation, but by saying that investor are losing more and more confidence in the United States is doubtful because the effects are too large. The world knows what happens when you lose confidence in a system all too well and will make sure that doesn't happen.

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