Sunday, July 24, 2011

US threatens world financial system - UK

The British Business Secretary Vince Cable

Source: Press TV

British Business Secretary Vince Cable says the US congressmen, whose infighting could lead to Washington's default on its supernumerary debt, impose a sizeable threat to the world.

On Sunday, Cable told the BBC that the obstructionists in the Capitol Hill had come to pose a bigger economic threat than the entire troubled eurozone states.

He said “the biggest threat to the world financial system comes from a few rightwing nutters in the American Congress rather than the eurozone.”

Republicans differ from the US President Barack Obama and the Democrats on the period of time the country needs to raise its debt ceiling to fare through the economic doldrums.

The chief executive and his fellow party members have campaigned for a relatively lengthier removal of the cap.

The US officially hit its USD-14.3-trillion debt ceiling on May 16.

Washington owes about 47 percent of its public debt to foreigners. The biggest creditors are respectively China, Japan and the United Kingdom.

The US government could potentially default on its debts on August 2.

Such prospect could lead to increase in interest rates, devaluate the dollar and rattle the economies across the world.

However, the House of Representatives Speaker John Boehner has said he would unveil a bipartisan deal to raise the ceiling.

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