We are like a blindfolded man walking towards a cliff, and if we keep walking in that direction, very soon we will fall off.

That’s how Democratic Senator Chuck Schumer described the looming crunch over the debt crisis in the USA on the 7.30 Report last night. The man leading the charge for the Tea Party right of the Republican Party is Ted Cruz:

This article suggests that he knows exactly what he’s doing. Beyond getting rid of Obamacare, he’s destroying the Republican Party as we know it, to be remade in the image of the Tea Party. He also has an eye on running for president in 2016.

On the remake of the Party, most conservative Republicans fear they’ll be done over by the Tea Party come preselection time because it is so well organised, and, I believe, supported by Koch Bros funding.

On the presidency, there is a suggestion that he believes Obama will eventually be blamed for the chaos if the US defaults. There is another suggestion that he really is ignorant of what will happen if to the world if the US defaults.

Overnight our time a deal was concluded, I think essentially to kick the can down the road, as they say, until next February. Meanwhile Citigroup had already liquidated US Treasury bills falling due around the end of this month and reduced its exposure to government bonds expiring through to mid-December. That is, a major American financial institution was getting effectively downgrading what martin Wolf of the Financial Review described as “the world’s most important safe assets.” Defaulting is likely to be “a huge disruption to market liquidity and credit across the world.” Continue reading Armageddon avoided – this time →