The world is anticipating the showdown on Capitol Hill over the US federal budget and debt ceiling. The Republican controlled House of Representatives is on a beeline head-on crash with the Democrat White House. Both parties know the damage resulting from a default once the Treasury runs out of cash.

Many believe this would end soon. Hardliners though have blocked a resolution through the non-passage of a budget bill to fund Obamacare, resulting in the shutdown of some non-essential servies. 

House Speaker John Boehner had said he would work to avoid a default, as he once did back in August 2011. He does insist on budget cuts as a condition to increasing the debt ceiling. 

According to the US Treasury, as the main issuer of the world's reserve currency, where interest rates are a global standard, a default would result in catastrophe. The market reaction is to sell stocks, becoming liquid with a wait-and-see attitude until such time that the impasse is resolved.