“You would have to admit that the bond rating for the US...will be lowered again by spring of 2013, and I’m betting on a second lowering by the end of 2013.”
One would assume, in an open market, that a lowering of rating would cause an increase in interest rates. But this is not an open market. It is a Fed manipulated market and has been since 1992.
No, and even worse there's a number of non-market mechanisms to force other countries to debase or buy our treasuries. China goes along to some extent as long as we continue to fund their expansion by our consumption. That's why morons like Krugman claim that our economic problem is a lack of demand and it needs stimulating. It's not. It's a lack of savings and investment to grow our economy. The real goal of Krugman and his ilk is the demise of America.