Skip to comments.DID Standard & Poor Shoot Itself In The Foot By Downgrading The USA From AAA To AA+?
Posted on 08/07/2011 10:41:32 PM PDT by Razzz42
...Domestically, you are still better off with federal paper
than state or municipals. The S&P is merely confirming the Sovereign Debt Crisis.
There is no doubt that we have a serious Sovereign Debt Crisis. However, if that is the real reason for
the S&P Downgrade, then it should apply to ALL countries and the real rating should be BELOW JUNK!
Why? There is NO collateral! If a country defaults, you cannot go to court and seize property. You cant
run down to the National Art Gallery and start walking out with Renoirs. Illustrated above is a chart of
the Total Accumulative Interest Expenditures as a Percent of Total . Had we just printed money and
NOT borrowed this would have eliminated 68.2% of the entire national debt. There would have been
NO competition with the private sector to borrow reducing economic growth, raising unemployment,
and causing taxes to rise. We would NOT need a credit rating and inflation would have been at least half
the rate over the last two decades. It costs MORE to borrow than it does to print and there is NO
empirical evidence that borrowing is less inflationary than printing. Oh well! Thats just another of those
stupid myths. To make matters worse, 46% of these interest expenditures are exported and have just
ABSOLUTELY NO domestic stimulus affect whatsoever. So ya! Get those rich bastards. Tax all their
money to export it and stimulate the world. Keep that theory going and you should succeed in
accomplishing the socialist goal of the perfect world. Nobody will have any money and we should be a
third world country by then. But what the hell; we got those rich bastards! As Herbert Hoover wrote in
his memoirs; Sometimes government burns down the barn to get the rat.
(Excerpt) Read more at martinarmstrong.org ...
Anyway, his main point is, why not issue interest free money (by printing) instead of having to pay interest on bonds the US sells to foreign nations? Good idea but the banksters don't like it that way (no interest to collect or profit from).
Very interesting. The owner of S&P is McGraw Hill.
Pre-Marketing: S&P for sale?
Big breakup? Activists put pressure on S&P owner McGraw Hill
Standard & Poor was wrong on Enron, they were wrong on B.S. and they are wrong now.
Oh please... We deserve his rating or lower!
...To make matters worse, 46% of these interest expenditures are exported and have just ABSOLUTELY NO domestic stimulus affect whatsoever...
Either I’m missing your point about the destruction of money or you think interest/usury is a good thing.
It’s not just debt that is the cause of the lost AAA ratitng.
Since the housing/financial crsis, we have resorted to mob rule and gangster government, and gone from being a nation of laws to that of men. Many of the elements that contributed to having the higest rating, like a respect for property rights and orderly bankruptcy processes has gone out the window. And that says nothing about a radical executive that violates laws he doesn’t like. And that says nothing about the jacking of the capital reserve ratios in order to funnel money into Fannie and Freddie and governemntal entites with ratings AA and above, that got us into this mess in the first place. It really was no accident that all those mortgage securities generated by the GSEs were rated AAA and ended up ripping off investors all over the world in a really big way.
The US just isn’t the same place it was when I was a kid, and that’s a real shame.
Armstrong makes some very good points in his article, but the one above is not among them.
Weimar Germany in the early 1920's offers the solid empirical proof required by Armstrong--an ecomomic system committing suicide by printing press.
Are they planning to shoot themselves in the other foot?
You are missing the point about having to pay interest on bonds which are printed in lieu of actual money (printing). Besides, Wiemar was being forced to pay off war debts to other countries which ruined their local economy, the punishment for warring and losing. Where’s Wiemar today after the world banks inflict a depression on the world, at the time, starting with Wiemar?
Have a look at our US account balance for last year, and it’s much worse by now.
CIA World Factbook
Country Comparison: Current Account Balance
You got that right. Every credit rating group should have downgraded the US when the government ignored over a hundred years of bankruptcy law and took over GM. That proved that they will nationalize property just like any third world dictatorship even if they call it something else. Regards
If it’s from the Federal Reserve, there’s interest. Even if the government printed it without the discretion of the federal reserve, that would cost revenues to pay government employees, administrators and all for the printing. It would also, of course, inflate the money supply, making the currency worth less.
If you want sustainable revenues to pay those who still have jobs (government, services, etc.), those will have to come from a large manufacturing base. Have fun. Enjoy the ride.
S&P in bed wih bin bama? Crisis they didn’t want but want?
Note how they are trying to hang the downgrade on the Tea Party... which is not a real party in any sense.... but precisely what Obama fears most in the next election. He cares not one bit about how this decimates the self same citizens he says he cares so much for..... it’s all about getting re-elected. What a POS.
The real story was to set up a New world Currency this is what all this craziness of borrowing money was about the real goal to bring about or force the nations to comply with a One World currency!
Amerikan Expose | Hegelian Dialectic aka Marxist Dialect
S&P in bed wih bin bama? Crisis they didnt want but want?
I agree wonder if Barney Frank knew John Chambers...
Fannie & Freddy never got slammed but the US was slammed...
chickens come home to roost!
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1 day ago John Chambers, managing director of sovereign ratings at S&P was ... A gay guy without a cell phone.” as uttered by Punch Epstein in The ...
Maybe I’m an idiot (here), but what’s the point of having credit rating agencies if they wait for a default before telling you that you made a risky investment? That is exactly what happened with the housing bust, and a LOT of us think their execs should be doing time because of it.
If anything, they’re way too late in downgrading the US. We should have been downgraded a decade or two ago when it was clear what our state was regarding unfunded future obligations. By 2009, it was clear that the Obama administration had absolutely no concern about running up debt, and we should have moved to junk territory. By now, deep in junk territory.
So I have no idea what this guy is talking about - or we have multi-billion dollar business that do what any of us FReepers can do which is read the news, see that a company (or government) is broke, and then downgrade them. Yea...tough work if that’s all that is expected of them.
Anyone who does not think the US did not deserve a downgrade is an self-deluded idiot. Hey, don’t feel bad, the AnointedIdiot and much of the libtard progressive camp is in this camp.....=.=
Yes S&P did the right thing.
The other agencies have done it too, and some are threatening it.
but as all things Obama, the media is right there to demonize S&P, the taxpayers and Tea party.
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