FX.co ★ Karine Jean-Pierre: default could be gift to China and Russia

White House Press Secretary Karine Jean-Pierre supposes that Moscow and Beijing could benefit from a possible default in the United States. The fact is that the default is likely to be considered a collapse of the US economy.

At the press briefing, Press Secretary Karine Jean-Pierre was mostly answering questions about the upcoming default. Although the raising of the debt ceiling is more like a formality than a reason for serious debates in Congress, people need some comments from officials. “If there was a default, it would be a gift to China, to Russia, and to other competitors,” Karine Jean-Pierre said at the briefing. She thinks that “both Russia and China would look to use a default to demonstrate the chaos within the United States, that we’re not capable of functioning as a democracy.” The countries may use the situation to declare a collapse of the US economy. However, some analysts think that both Russia and China will benefit more from the loosening of sanctions than by a default. Apart from that, mass media has enough information to discuss a slump in the US economy for several weeks. Notably, if the US faces a default, this will primarily affect the countries that use the greenback. “A default would create global uncertainty about the value of the US dollar and the US institutions and leadership, leading to volatility in currency and financial markets and commodity markets that are priced in dollars,” Jean-Pierre emphasized.

Earlier, US Treasury Secretary Janet Yellen predicted the date of a default in the United States. She supposes that Washington will run out of money at the beginning of June. “And there is a chance it could be as early as June 1st. Of course, there is a lot of uncertainty,” Yellen pinpointed.