Debt Ceiling and Real Estate Investing

[Marcus Auerbach]

My grandfather said once, just because you have not seen it in your lifetime, doesn't mean it can't happen. He has lived through the great recession 1929 and WWII. I start to wonder if I have been too optimistic about the US defaulting on it's debt payments as our two political parties are playing a game of chicken with basically the world economy at stake. This is the big headline this morning in German newspapers and I imagine everywhere else. The fact that we are even having this situation seems so unbelievably irresponsible as it will do doubt harm the standing of the USD in the world.

But politics aside, I wonder how this could impact the US real estate market, perhaps in a way we do not anticipate. If the 10 year treasury goes haywire we could see mortgage rates do the same (looks like the last few days we are on our way back to 7% already..) I have read that CFO's of large companies have increased cash positions to cover at least the next 2 payroll cycles - are they over reacting?