There has been a lot of speculation about what will occur if Congress fails to meet the impending October 17th deadline to raise the country’s debt ceiling and avoid a budget default.
Most assume that the politicians will not let a default occur, and both John Boehner and Barack Obama — the two most prominent faces in the current government struggle — both have declared that they will not allow that to happen. Given the recent actions of many politicians on Capitol Hill, however, citizens are not totally ruling out the idea of a default.
If Congress fails to raise the debt ceiling, significant economic repercussions are likely to take place throughout the country (which will subsequently have effects throughout the world). As interest rates rise, the stock market will fall, and many believe that the nation would be pushed back into a recession worse than the one that occurred in 2008. This will cause major setbacks for the majority of citizens throughout the nation.
In an article posted on Mother Jones, however, writer Erika Eichelberger suggests that some may actually benefit from Congress’ action if a default occurs. Specifically, Eichelberger points to those that have invested in gold and silver. The price of gold and silver has increased in the past few weeks, largely due to speculation and fear of a government default. Vocal supporters of gold, such as former Congressman Ron Paul, have long been on the fringes of libertarian paranoia, but that anxiety about a large-scale economic collapse may soon be justified.
While gold tends to be relatively predictable in its monetary value — it’s essentially always valuable, since the metal is what our current economic system was originally based on — Bitcoins are entirely unpredictable. The form of deregulated online currency, in which users have a digital wallet that shows how they’ve spent BitCoins - each of which has a specific, unique code (while keeping the transactions anonymous), fluctuates often because it has no centralized, governing distribution system. However, the value of BitCoins has been closely aligned with the value of gold in recent years, which leads some economic analysts to believe that the currency will remain strong even if the U.S. economy fails.
Other survivors of the economic collapse are likely to include pawn shop owners (who did well in the last recession) and short selling investors that cash out before the stock market collapses.
Hopefully, of course, none of these speculations will be tested, and Congress will raise the debt ceiling prior to the October 17th deadline.