China, the one of the leading economy in the world, is also one of the biggest investor in the US treasuries. It has invested around US $ 1.28 trillion in July 2013 according to US Treasury data. As China also invests through intermediaries the figure might go quiet up. The next power house of Asia, Japan is the second largest investor in the US treasuries. It has invested about US $1.14 trillion at the end of July. If the total figures invested are accounted for, they have invested about US $40 billion in the US treasuries in totality. Out of the total outflows of longer-term US securities, it accounted around US $66.9 billion in June. The figure rallied up to US $ 755.3 billion till the end of September considering the 11 months period of the previous fiscal year. Looking at the figures of the foreign exchanges made by the nation, China held around US $3.50 trillion at the end of June whereas Japan alone clutched foreign exchange reserves of about US $1.21 trillion at the end of September.

The US has been on a deadlock since the end of the previous fiscal year without any consensus over the budget between the Republicans and Democrats. The end of the seventh day of the US government has not sought out any sign of blinked eyes from their respective part. With the threat of the US debt crisis to run over from the 17th of the October, the major investors in the US securities are on a fear over the issue. The default by the US government to pay off its debt obligations would smash down the US Dollar as the world’s reserve currency. The US Dollar which has been accepted as the reserve currency worldwide will lose its faith making it a cheap currency.

A lot of predictions regarding the consequences of defaulting of debt are made. The past of the seven days of the US government shutdown and the nearing deadline to raise the US debt ceiling only 10 days behind, no any signs of negotiations are sought out. The USD 16.7 trillion debt ceiling could lead to the downtrend over the confidence over the US government, forced spending cuts, halt the improving economic conditions, lead to crash of global market as the US would dent its credit ratings and a lot of consequences are about to erupt thus affecting the overall global economy. The countdown is still on its way!