In the unlikely case that legislators allow the U.S. government to run out of cashand fail to make payments, the world's wealthiest country will join a long list of developed countries who have, at one time or more in their history, defaulted.
Taking a long view, Ralph Dillon at Global Financial Data charted out major countries' 10-year bond yields dating back to 1800. What we see is that some countries have fared better than others during a default.
"For the developed markets and global economic powerhouses, those that did default are still here alive and kicking," Dillon wrote to clients. "In fact, some have defaulted 8 times and are still a major player on the world stage." Here's Dillon's breakdown:
1. United States 2013?
2. Germany 1938,1948
3. Japan 1942, 1946-1952
4. France 8 times between 1558-1788. Last one in 1812
5. Italy 1940. Almost daily speculation of another default since 2008
6. Spain 1809, 1820, 1831, 1834, 1851, 1867, 1872, 1882 and 1936-1939. Since 2008, Spanish yields spiked considerably and have been volatile on the back of another default
7. Austria 1938, 1940, 1945
8. United Kingdom 1822, 1834, 1888, 1932
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