Price to Insure Nation's Debt Rises Sharply

Friday, 27 Sep 2013 01:38 PM

By Lisa Furgison

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
The cost to insure the nation’s debt just got way more expensive.

According to the Wall Street Journal, the cost to insure $10 million of the U.S. government debt for one year is now $41,390. That’s six times more expensive than it was just last week.

The spike in price comes as investors fear the nation could default on its loans. The debate over whether to raise the debt ceiling is fueling these fears, as lawmakers argue about the best way to hand the nation’s debt.

The cost to insure the debt is based on complicated math formulae, known as credit-default swaps which protect against nonpayment.

The insurance quote is actually given in euros to protect investors in case the value of currency drops. Last week the cost to insure the loan was 5,000 euros, now it’s 31,000 euros ($41,390).

Investors are so nervous about government’s ability to make payments, the cost to insure the loan for one year is the same as protecting it for five years. It’s the highest price to insure the nation’s debt since 2011, which was the last time the debt ceiling was a hot topic in Washington.

Related stories:

GOP to Offer Plan to Suspend Borrowing Rather than Raise Debt Ceiling

Treasury Secretary to Congress: We Will Hit Debt Ceiling in October




© 2014 Newsmax. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Medicare May Cover End-of-Life 'Death Panel' Talks

Monday, 01 Sep 2014 10:56 AM

Five years after the political firestorm over 'death panels,' the issue of paying doctors to talk to patients about end- . . .

California High School Retires Divisive Arab Mascot

Monday, 01 Sep 2014 10:46 AM

A Southern California high school has retired a controversial Arab mascot. The bearded, snarling mascot with a large hoo . . .

David Muir Takes Over at ABC's 'World News'

Monday, 01 Sep 2014 10:37 AM

Among the stories David Muir will introduce during his first week as ABC's World News anchor is one he reported about  . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved