English: (Photo credit: Wikipedia)

English: The holders of the United States national debt as of December 2008. (Photo credit: Wikipedia)

This is an excellent, MUST-READ article by highly respected macro-economist, Gavyn Davies, writing in his FT blog.

US default by any other name | Gavyn Davies.

The financial markets seem to be betting on a settlement for the moment but we could still easily see massive selling or shorting in the coming weeks. Meanwhile, according to the latest Gallop survey, reported in the NYT, economic confidence has taken a nose dive.

Gavyn Davies expertly explains the doomsday or melt-down scenario towards a US default, considering risks, opportunities and probabilities.

Let me ask an open question:

After the economic damage that the US unloaded on the global economy following the sub-prime crisis in 2008, is it really possible that the US would force the World back into recession by defaulting on US Government debt?

Any thoughts?

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