Foreign investors look at U.S. debt ceiling debate and shrug
Flags of the European Union countries are hoisted in front of the European Parliament in the French eastern city of Strasbourg.
STEVE CHIOTAKIS: Finance ministers from the group of G20 developed countries are meeting in Washington today. Including Treasury Secretary Tim Geithner, who keeps pushing the Obama administration's confidence that the U.S. Congress will raise the nation's debt ceiling. That's despite calls from some Republican House members to cut spending even more before they sign on.
And yet, in spite of all the political gridlock in Washington, there's no sign -- at least for now -- that foreign investors have lost faith in the U.S.
Here's Marketplace's Stephen Beard.
STEPHEN BEARD: There may be a crisis in Washington. But the financial markets are calm. There may be no agreement to raise the debt ceiling, there may even be talk of default as early as July, but investors remain unruffled.
Neil Mackinnon of VTB Capital group says that's because, we've been here before:
NEIL MACKINNON: Over the years there have been these incidents where the debt ceiling is in danger of being breached but there has been a resolution at the very last minute to avoid that.
And says Mackinnon even if the debt ceiling is not raised the government can still pay its way by selling its substantial stock of treasury bills. But he says there's no doubt that if the U.S. doesn't begin get its huge budget deficit under control in the medium terms, investors will take fright and dump the dollar.
In London, Im Stephen Beard for Marketplace.