U.S. government debt ceiling / technical default

Seasons4 - September 23, 2021

Greetings, everyone. I’m curious to hear any thoughts on the risk of a U.S. government technical default if the debt ceiling isn’t raised. I’m not an expert in this field, and I’m using terms loosely. I realize that every year the same situation occurs. My thought is that the current political environment might make this year *not* business as usual. Are you making any changes in financial preparedness given your assessment of this risk? Thanks, and thanks to everyone involved in this website.

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Good morning Seasons 4,

You’ve already presented this being a somewhat routine event.  It is.

When, for example, a bond loses half it’s face value, it’s a default. This didn’t start only recently.

This year just speeds things up – IMO, .. the political establishment – both sides – wants to get ready to weather the economic storms pending. A current example is USG financing submarines for the domestic economy under pretence Austral can use them years later to work the South China Sea.

Am guessing the middle class will not have the subsidized stuff it’s had since FDR – earlier special industries and groups got stuff well prior to FDR. Before the Watergate scandal, it was “Teapot Dome”, a Naval PEtroleum Reserve. I love gallows humor and this is what it was all about.

Yes, yes, yes ! My financial preparedness had changed to address this financial environment. Am anticipating much perhaps massive inflation.  To me it’s about the same; don’t have that much $ especially in retirement.

An example of an environment like we’ll get was Zimbabwe printing so much money, it became worthless. 

Thus, … if I need something, .. yesterday went to Lowe’s big box store to get a squeeze tube of Liquid Nails brand adhesive excellent for field work … Got a road trip and day of volunteering in nice Virginia area and need it for my loadout … I bought all other of their packs using today’s “money”.

Am doing this while maintaining my thrift habits. I consider it a savings having the extra glue.

“To thine own self be true … ” Forgot where Shakespeare wrote quote.

Glad you brought this up.  It’s typically not a traditional prepper subject like getting mre multitools and extra supplies for BOB.

 

I think there is a bit more posturing on both sides of our (horrendous) two-party government this year, but overall I do not believe they will default. Our government’s love of borrowing “money” is second to none. I think there may just be enough antagonism on both sides to push their luck and trigger a downgrade in the S&P rating which could result in higher prices and supply shortages, but we’re already seeing that and this will just give them something else to blame (other the the very real problem of not understanding the core definition of the word BUDGET). 

Have we changed anything about our preps? No. While there is no such thing as being fully prepped, we have our food and essentials storage at a comfortable 9-month supply and will continue with our planned monthly expenditures to replenish and increase this. We have started buying our Christmas presents for the kids early though, if only to avoid shortages and price hikes.