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Hewison Insights
US economy

Crisis Averted

Nathan Lear
Partner/Private Client Adviser
28 Oct 2013

Surprise, surprise, with hours to spare the US Congress passed a bill to re-open the government and raise the federal debt limit.

US politicians have been “playing chicken” with the US economy. Global markets welcomed the news that the debt ceiling has been extended to 7 February 2014.

If a deal was not able to be reached, it would have resulted in the US defaulting on its debt. The flow-on effects would have been disastrous for global markets.

The world’s greatest investor, Warren Buffett compared debt ceiling politics to that of a nuclear weapon, saying “it ought to be banned as a weapon. It should be like nuclear bombs, basically too horrible to use.”

The deal only offers a temporary solution to the budgetary divide between the Republicans and Democrats. Let’s hope common sense prevails and an agreement can be reached prior to the new deadline in February next year.

Markets responded favourably to the news and have continued their strong recovery: Australian shares have since surged past 5,300 points.

While there is recovery in Australian shares, we see value in the market. It’s never too late to invest as long as you have the right strategy in place.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.