US started talking about possible default if debt ceiling (upper level) is not raised, that means if it is not raised credit rating agencies may decrease US rating, if this happens markets are going to sold and crisis is inevitable again.
All these talk about potential default and crisis again has started in order to increase debt ceiling, they show people that debt ceiling necessary otherwise more problems are ahead. From these points above we can assume that, debt level will probably be raised, US do not have any other way. So, this additional borrowing increases capital level available, that correlates product prices positively, so product prices may increase again. This kind of policies just postpones all this debt problems for the future, with bigger scale.
After debt ceiling increase, purchasing power for average people probably decreases and when the capital availability in the market decrease – because big portion of the wage will be spend on food, demand for some industry products will change.
As for USD, its value in real terms will decrease; however, its exchange rates with some currencies may not change dramatically, because some countries will try to keep competitiveness. Capital outflow from for instance US will increase further and that will create some bubbles in mostly developing countries.
Interest rates may stay in the range until inflation starts to accelerate, if US manages to hold somehow CPI longer time, that will create more instability globally for some product prices. After some years in the future new normal will be created with different prices, supply and demand.
P.S. Agricultural products are going to be very highly demanded globally and prices most likely will increase gradually. This may force some people to start thinking about agro business as a good opportunity that may develop farming business. I think more people will be involved in the future in that industry. That may not happen in the short term, but eventually is going to be the case
