Top US banker Jamie Dimon of JPMorgan Chase warned Saturday that the United States needs to avoid defaulting on its debt, saying the possible repercussions are unfathomable.
“You don’t want to know,” Dimon said when asked what would happen if the US is forced into default because Congress did not raise the country’s borrowing limit.
“It would ripple through the world economy in a way that you couldn’t possibly understand,” he said at a discussion held by the Institute of International Finance, a leading forum for the world’s banks.
He said it would shock the money market, where trillions of dollars in cash are invested in ostensibly top-quality securities like US debt based on expectations that the borrowers will not default.
“You don’t know the ripple effect of that through money-market funds,” stressed Dimon, head of the largest US bank by assets.
“The money markets are the most fickle markets in the world, they’re like a rabbit.”
Dimon was speaking as the White House and congressional Republicans remained deeply at odds over passing a budget and raising the US debt ceiling, a move needed to ensure the government can continue to pay its bills.
The US Treasury has repeatedly warned that as soon as October 17 it will be short of cash and forced to default on its obligations, though not saying whether it would skip debt payments or others, like social security payments to retired Americans.
With no compromise apparent, and the government partially shut down now for 12 days due to lack of a budget, Dimon warned that the deadline was looming.
“As you get closer to it, the panic will set in,” he said.
On the other hand, he emphasized: “The US cannot default. I think every responsible person knows that.”
‘The man who sold America’: Mitch McConnell’s mountain of political sins catalogued in devastating new profile
Mitch McConnell finally has the power he's longed for since he was a 22-year-old intern for Sen. John Sherman, but his ruthless march to become Senate majority leader has seen him abandon almost all of his stated principles -- and earned him a lot of enemies.
The Kentucky Republican has been unpopular in his home state for years, but this summer has seen his approval rating plunge to 18 percent after MSNBC's Joe Scarborough tarred and feathered him with the nickname "Moscow Mitch," and he's increasingly seen as "the man who sold America," reported Rolling Stone.
Sarah Sanders rages on Fox News that the ‘out-of-control’ media is ‘making stuff up’ about Trump
In her new gig as a Fox News contributor, former White House spokesperson Sarah Huckabee Sanders complained to host Sean Hannity that the "out-of-control" media makes "stuff up" about Donald Trump because they hate him for winning in 2016.
Sanders, who once told reporters that "countless" FBI agents had lost confidence in James Comey only to later tell investigators from special counsel Robert Mueller's office that she made it up, complained to the Fox host about the press being untrustworthy.
Inside the secret GOP plan to keep power in 2020 — and beyond
In 2020, we need to pay attention to state elections as well as elections for president and Congress. State elections could decide whether the Republican Party further corrupts American democracy.
As demographics change — and America becomes more diverse and more liberal — the GOP has responded by implementing policies that will take away power from the American people. Rather than changing with the times, they’ve got another plan: minority rule – by them.