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.