Tell me something, do you really understand what is the US situation? Do you really understand what a default is? Me either, so I did a little search and I understand nothing so I did a re-search and I understand what is, actually I lived it. I was living in Argentina when the country entered in default. I´m going to try to explain to you what is a default? What happen with a country in default?
I´m going to start with my own experience, ok, first what you hate more, HISTORY, a little bit of history, it will be short, I swear. In 2001 Argentina entered in default, what happened here? A social revolution, the president, Dr. de la Rua resigned, do you like Shakira?,well the de la Rua´son went out with her for like 10 years, the de la Rua family are really good with girls, not so much with numbers. Anyway, in Buenos Aires the people protested in the street, and it was so bad that actually there was one dead and who knows how many injured, socially it was a disaster, there was two presidents in 48 hours, just a disaster but economically it´s actually a little bit more easy to explain, there was a lack of jobs, just like that, and people had to leave the country because it was impossible to find a job, will this happen in the US? Or in Greece? I don´t think so, why? Let me explain.
In Greece it did happen a social protest but I don´t think that the economy people, like I like to called to the real economy, the economy of a family, the economy of a person, of the country with be affected like in Argentina because Greece is an European country with a strong economy and opportunities to do a good come back. Before to go what it matters, the U.S., let me explain what a default really is. Default means “failure to pay” so… if a person cannot pay its bills, well, enter in default, it just that, have you never found yourself unable to pay your credit card? I had, and I’m alive, nothing happen, I was a little bit short of money and that´s all, well that is what happen with a country enters in default, of course if you live in a weak country like Argentina, maybe, just maybe will affect you and for most people it won´t be the end of the world, like I said, there was a lot of people complicated but for example, all I had to do in that time was walk and walk trying to find the best place to exchange dollars.
So, this is the thing, when you cannot pay your credit card, what do you do? Go to the bank and say: I cannot pay my credit card, I need a payment plan. What they do after spend like 4 hours asking you your exact situation, the let you pay your “default” in quota, you pay your bill in months and of course with an interest.
If the US entered in default is exactly what will do, will it affect you?, if you are the owner of Ford, the president of Coca Cola, or Donald Trump, maybe and just maybe because this kind of people play in the market and wall street and that kind of things and in a country in default, the market will be weak, I don´t recommend put your retirement saving in a default market but if you have money and you are willing to lose it, PUT YOUR MONEY IN A DEFAULT CONTRY, you will buy stocks for a penny and then you can sell them for hundreds.
I know haven´t being very professional in my explanation, but I didn´t want to be, the idea was show the default country situation not being like the TV economist that say they will be clear and then start to pull numbers from under the table.
So, this is what I recommend you to do in a situation like the US´. If you have some foreign money, pay attention to the exchange but not only to that but also to the market, WAIT, i´m not saying tune Bloomberg 24/7, actually that will only confuse you, what you need to do is just know if Wall Street is up or down, just that and if the market of the money you have is up or down, example, if you have euros, well, after breakfast, tune some European channel and look how is the IBEX (Spain market) for example, why? Because if the European market is up, probably the next day the euro will be up and you will able to exchange at a better price. If you don´t have euros, what you have to do is just DON´T BUY ANYTHING AT LONG TERM, no mortgage, no credits, no nothing, I mean, a new TV, well, try to buy it at 3 month, why? Because the economy will be unstable and who knows what can happen and if you buy something at 2 years maybe you will need that money and because the process will be unstable too, so, what you buy today at $10 in a month or two can be at $5.
Again, what will happen if the US actually enters in default? Well, it will be harder to get a scholarship, for example, your boss won´t increase your salary (this is just the company excuse to not increase you the salary because if the people, in a default country have money it´s easier to get out or the default because the people will spend and the economy will start to function again), what will happen? basically, things that are hard to find will get harder. But things that you really need will be there, the gas price will increase, and the expensive products will be even more expensive but everyday thing will be there.