- The world is watching the U.S. and is worried about its debt crisis and possible default
- A panel chaired by CNN's Richard Quest Thursday will discuss the issues
- Countries including Spain, India and China could all be hit by the debt crisis
- U.S. is in partial government shutdown and is also facing a default on its debts
The world is worried about the U.S. debt crisis. The president of the World Bank, Jim Yong Kim, told me on Wednesday the bank was "ready to go" with help for poor countries caught up in the backwash of the world's crises.
Interest rates will start to rise, capital will flow from emerging markets into safe haven currencies like the U.S. dollar and Swiss franc. In short, the rest of the world has a very real interest in what's happening in Washington D.C.
In the global debate at the International Monetary Fund Thursday I have no doubt the panel, which includes India's new central banker governor Raghuram Rajan, will be concerned.
Rajan has just raised interest rates because of the summer assault on India's currency by investors fleeing to safety. The prospect of a debt default by the U.S. will turn this into a flood.
Spain's economy minister Luis de Guindos, also on the panel, must be worried about any U.S. slowdown that could stifle Spain's prospects of recovery.
And China's deputy central bank governor Yi Gang will surely have an eye on his country's $2 trillion in U.S. government securities. The bond market is likely to become more volatile as the uncertainty rises.
So, the world's finance ministers and central bank governors are like spectators watching a domestic dispute. They know, however, they will have to help pick up the broken pieces of china strewn about after the fighting ends.
I will let you know what they say, on Quest Means Business tonight.