The days are numbered for an agreement on the U.S. debt ceiling and there’s plenty of controversy surrounding the issue with ratings agencies announcing their review of U.S. sovereign debt for a possible downgrade plus President Obama having walked out on budget talks. An agreement must be in place by 2 August, but so far there’s no solution and U.S. politicians are struggling to come even close to one. There's little doubt that an agreement will be reached as the financial market ramifications of not agreeing before the deadline are too great. However the stakes are high and increasing the debt ceiling is hardly a tenable solution for the U.S. economy, but as always politics rather than common sense is playing a big role. Steen Jakobsen, chief economist, Saxo Bank analyses the U.S. debt ceiling situation and also gives his views on the recent comments made by Federal Reserve Chairman Ben Bernanke concerning a third round of quantitative easing.