When President Barack Obama signed into law the bill increasing the debt ceiling to $16.7 trillion, Americans might have breathed a sigh of relief that the danger of default is over — for now (and probably until spring 2013).

Although rating agency Standard & Poor's downgraded the top AAA rating for U.S. debt by one notch to AA-plus, Moody's confirmed its AAA rate with a negative outlook. So, the U.S. will not jump from the frying pan into the fire of a downgrade by all three leading credit rating agencies, but it has leaped into a pan of water that is on the boil.

The shenanigans that pass as politics in the United States have exposed yet again the danger of the world's reliance on the U.S. and the fragility and deficiencies of the global financial system. When it comes to collateral damage, the most vulnerable country — after the U.S. itself — is probably Japan.