RDS
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- Oct 21, 2009
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Does the kids who are bickering now understand this?
US debt default will rock global system: PMA UNITED States debt default will shake a fundamental element of the global financial system and cause it to enter uncharted waters, Prime Minister Lee Hsien Loong warned yesterday.
"If that fundamental element is shaken - even the US government can default - I don't know what will happen to your spreads or the rest of the complicated system of financial markets. You're going into unchartered waters," he said.
The US government and lawmakers have until Thursday next week to reach an agreement and avoid a first-ever default on US Treasury bonds - a scenario that economists are warning could throw the world economy into a tailspin.
Mr Lee was speaking to reporters at the end of the Asia-Pacific Economic Cooperation (Apec) summit here yesterday.
He referred to the political brinkmanship as an experiment that should be avoided, saying "nobody knows what the impact will be", as it would be the first time such a US default happened.