If US defaults, do you think there will be layoffs in india?
What are you guys doing to over come the risk of US default?
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It’s actually complex you are connecting country’s debt to economic recession / downturn. Currently, there are too many confounding variables e.g sticky inflation, supply chain constraints, interest rate hikes, currency war B/w BRICS and West To break it down a bit based on simple economics
- Default: when US will not be able to service its debt, next question is whether this faliure of payment is temporary or structural (e.g US spending more of its taxes on nation building vs payment, high interest rates might be elevated for next 3-5 years)
- Restructuring: Lenders would restructure the loan ask US to reduce defence spends, increase corporate tax, income tax, etc.
- Reputation loss: default by the largest economy will impact investor confidence in dollar and US
- Green shoots: BRICS with stabler economy or lower debt levels will become attractive for investment
- Investor will still be hungry for returns and hence will compare portfolios to May be reinvest in US or diversify to other nations
Thats a great second order thinking
A reserve currency never defaults... They can print more money, live with inflation rather than default. Plus the lender would allow it, because there is no better party to give debt to, instead of US. Other developed countries don't borrow as much as US
If US defaults, there will be a huge economic crisis across the world. Layoffs would've happened way earlier just with the signs of US defaulting
There will be layoffs. But rest assured that people holding USD (investors) will move to safer currencies such as INR or Yuan and the values of these will go up relative to other currencies. These investors will then plough their money in some form in India and China depending on opportunities. They won't invest in US. So, it's both good and bad.
US defaulting?! Something like that will only happen if like Yellowstone blows up haha
Tis just a game
bro aap gareenb country se aate ho. Agar company ke financials bahut hi kharab ho jaye to pura Indian div band kr skte hain, which is less likely
Won't affect Indians much.
Definetly layoffs will happen. Irrespective of what the actual outcome is. Companies will take the most conservative approach in times of uncertainties