America the largest economy in the world. But if we talk about the economic front, these days negative news is coming from all sides for the US economy. There, in the last few months, many big banks drowned.
What did the finance minister say
US Treasury Secretary Janet Yellen warned on Monday that the US could run out of cash as early as June 1 if the government fails to raise the debt ceiling. It may then default on its debt repayments.
Yellen said in a statement that if Congress does not increase the debt limit before June 1, then we will be unable to meet all the obligations of the government by the beginning of June.
American banks are in trouble
If you look at the last few months, many banks have sunk there. Not only this, the signs are not good even further. It is said that many more banks there may collapse. Because people have withdrawn more than one trillion dollars from banks in a few days.
The US dollar is currently facing a tough challenge all over the world. Many countries have started trading in their own or any other currency instead of the dollar. At present, the Debt to GDP ratio there has also reached a record level.
First time default risk
This is happening for the first time in the history of America. Earlier, America was never at risk of default. In fact, if the debt ceiling of America is not increased till the coming July, there is talk of disaster.
Defaulting has its dangers. It is estimated that if America defaults, more than 7 million jobs will be lost in one stroke. This will also cause a decline in US GDP. When this happens only in the leading economy of the world, then it is bound to affect other countries of the world as well.
Warned in January this year as well
This is not the first time that the US Finance Minister has given such a warning. Earlier in January too, he had warned that the US could default on debt payments by June. This is because America has crossed the debt limit. That’s why Yellen had requested the Parliament to increase the debt limit as soon as possible.