World To US: Stop 'Tap Dancing' And Solve Default Crisis - NBC Right Now/KNDO/KNDU Tri-Cities, Yakima, WA |

World To US: Stop 'Tap Dancing' And Solve Default Crisis

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NBCNEWS.COM - The approach of the U.S. default deadline — with no clear resolution in sight — is being greeted around the world with a mixture of angst and anger. "It's hard not to believe lunatics have taken charge of the asylum in Washington," the newspaper The Australian declared Monday, predicting significant damage to the global economy if the government can't pay its debts."

America is diminished by the standoff," the editorial continued. "Government shutdowns, debt defaults and the shenanigans witnessed in Washington have no place in the world's superpower." China, which is America's largest creditor with $1.28 trillion in U.S. treasuries, went as far as calling for a new world order — a "de-Americanized" model.

That may be an extreme reaction, but international economists and opinion-makers aren't holding back as they assess crisis. International Monetary Fund Managing Director Christine Lagarde told NBC News' Meet the Press that the prospect of default, combined with the government shutdown now in its 14th day, overshadowed its annual meeting.

"If there is that degree of disruption, that lack of certainty, that lack of trust in the U.S. signature, it would mean massive disruption the world over and we would be at risk of tipping yet again into recession," she said.Anshu Jain, chief executive of Germany's Deutsche Bank, said blowing the Oct. 17 deadline would be "utterly catastrophic."

"There isn't life beyond default," he said at a financial-industry conference in Washington over the weekend. "This would be a very rapidly spreading, fatal disease." The governor of France's central bank, Christian Noyer, told Le Figaro that Washington's inability to pay its bills would be a "thunderbolt for the financial markets," and cause "extremely violent and profound" economic turbulence, according to Agence France Presse. 

There were complaints that while the Republican and Democrats in Washington were bickering with little regard for the dire consequences to other countries who depend on American stability. "World leaders are saying, 'Get on with it and get this resolved.

It's not just about you,'" Mike Kendall, executive director of JBWere, a private wealth management firm in Australia and New Zealand, told The Age of Melbourne. "This isn't the time to be tap dancing to the mid-term elections in the U.S. This affects everyone."

Meanwhile financial markets around the world are reacting to the ongoing impasse with fits and starts. The U.S. dollar fell on Monday while the Japanese yen rose on "safe-haven" demand. "The markets went home on Friday expecting a deal would be imminent.

While there's a heap of conciliatory language around, there's no deal yet," said Sam Tuck, currency strategist at ANZ Bank in Auckland."Now that we're in the week where the debt ceiling will be hit, the yen's gaining on safe-haven bids."

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