This is an extremely low probability event as it would totally wreck the world economy for at least a year and all the band-aids they have put on the various haemmoraging debt carcasses from the GFC would be useless as cost of capital spiralled upward. Asia would eventually come out of the ruin with their economies battered but intact but the West would be totally annihlated. The euro would disintegrate as well as their economies could not afford higher real capital costs.
More likely I think that Obama is using this as a scare tactic to force the big holders of Americas debt to agree to QE3 (and beyond).
Commodities looked like they made lows this week, could see a technical bounce here at least.
