DID Standard & Poor Shoot Itself In The Foot By Downgrading The USA From AAA To AA+?

www.martinarmstrong.org ^ | August 6, 2011 | Martin A. Armstrong

[BobL]

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.

[cranked]

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.....=.=

[Freddd]

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.

The victims.

[GonzoGOP]

There is NO collateral! If a country defaults, you cannot go to court and seize property.

The author should read a little history. This exact thing happened several times in South and Central America during the 19th century. When some tin horn dictator missed a payment the Royal Navy or someone else would seize the custom houses and collect the import taxes until the loans were paid off. What stopped that practice was the emergence of the US as a serious naval power in 1898 and our ability to actually enforce the Monroe Doctrine. With the US now being the country in default watch for US property to be seized to force repayment.

Now I'm not talking about grabbing California, although I might be glad to be rid of San Francisco. No they will grab US assets held in foreign banks. Stockpiles of US equipment stored in Europe, Asia and the Middle East. The US has billions of dollars in assets spread all over the world. So they don't have to come to New York to seize them. There are also the assets of US corporations. There are more than one Hugo Chavez style dictator out there who would welcome an excuse to nationalize some imperialist Yankee company. And failure to repay debt gives them all the excuse they would need.