by Robert Gottleibsen
Australia will not escape serious flow-on effects if the US defaults on its government debt. Not only will global interest rates rise but a US default will have severe effects on the international derivatives market, where we are a significant player.
And, as I explain below, a prolonged US crisis could be the trigger that sends the European banking system into a downward spiral. World share and debt markets remain confident there will be a US deal on its debt crisis before Thursday, American time, and they are probably right – the US is ‘too big to fail’.