The truth is that what scares some number of desperate actors in government is not a sovereign default but a sovereign debt credit downgrade. After all, there will be no default if an agreement isn't reached since the U.S. Constitution's 14th Amendment necessitates that all government debts, and interest on such debts, must be paid prior anyone to else in government getting paid. That means that, in the event the debt ceiling is not raised by August 2nd, a lot of government operations would be frozen as their funds were instead redirected to pay Uncle Sugar's creditors. Such an outcome would be unpleasant for many, but no one should confuse that with a sovereign debt default. However, a partial government shutdown, along with various other developments related to said government shut down, could trigger a credit downgrade which is what worries our legislators the most. Well, it should worry them the most since such a development would make all present and future sovereign debt obligations substantially more expensive for Uncle Sugar.
Just so you know, whatever next week holds legislatively, the death of the dollar is assured. It's demise will not be avoided. Belabored? Almost certainly. Postponed? Perhaps, though that too is looking increasingly unlikely as things are unraveling at an accelerating pace. You see, there is a timeline involved with respect to the life of our currency, our medium of exchange, and while it is very difficult, perhaps impossible, to say precisely when that timeline concludes-picture if you will the sand running out of the top of an hourglass-conclude it will. In in the meantime, as more and more sand runs out of the top of the dollar's hourglass, the ability to say with some precision when that last grain of sand will fall to the bottom of the hourglass becomes easier and easier to predict.