I Told You So

6 Aug

From Reuters:

The United States lost its top-notch AAA credit rating from Standard & Poor’s on Friday in an unprecedented reversal of fortune for the world’s largest economy.

Five days ago, prior to the US raising their debt ceiling, I wrote this:

Why The US Is Doomed, And The Debt Ceiling “Crisis” Is Irrelevant

If you missed it, click on the link above to see the chart from the New York Times which explains why – whether it be now, or later – the US economy is doomed.

UPDATE:

Dow Jones Newswires comments:

Standard & Poor’s has taken the unprecedented step of downgrading the US government’s “AAA” sovereign credit rating, in a move that could send shock waves through global financial markets and potentially undermine world economic growth.

In a press release, S&P, today cut its top-notch long-term credit rating for the US Treasury’s debt to AA plus with a negative outlook. It is the first time in modern history one of the three main ratings firms has stripped the US of its coveted AAA rating.

S&P warned last month if the US government didn’t approve a credible medium-term plan to shrink its fiscal shortfall, it would downgrade the rating even if Congress approved a debt deal that raised the Treasury’s borrowing limit.

UPDATE 2:

The Wall Street Journal:

A cornerstone of the global financial system was shaken today when officials at ratings firm Standard & Poor’s said US Treasury debt no longer deserved to be considered among the safest investments in the world.

S&P removed for the first time the triple-A rating the US has held for 70 years, saying the budget deal recently brokered in Washington didn’t do enough to address the gloomy long-term picture for America’s finances.

It downgraded US debt to AA+, a score that ranks below Liechtenstein and more than a dozen other countries, and on par with Belgium and New Zealand.

What did then Opposition Finance spokesman Barnaby Joyce say, back in February 2010?

“If you do not manage debt, debt manages you”.

Barnaby is right.

Advertisements

3 Responses to “I Told You So”

  1. Oliver K. Manuel August 6, 2011 at 12:53 pm #

    Your concerns are well founded, but I am quite certain that world leaders are not really in control of anything. Out of fear of mutual nuclear annihilation, they foolishly brought Western economies to the brink of disaster by promoting AGW.

    http://dl.dropbox.com/u/10640850/20110722_Climategate_Roots.pdf

    It is no mere coincidence that Western economies and government propaganda on SSM (standard solar model), AGW (anthropologic global warming), OSN (oscillating solar neutrinos) and future energy security based on a misunderstanding of the Sun’s energy source – neutron repulsion in the solar core – are all collapsing now.

    http://arxiv.org/pdf/1102.1499v1

    The tenacious SSM, the Standard Solar Model of a Hydrogen-filled Sun, was concluded at an international study week held in the ‘Bilderberg’ near Arnhem, Netherlands, on 17 through 21 April 1967 “with the aim of obtaining an internationally acceptable model of the solar photosphere and low chromosphere” [ O. Gingerich and Cees de Jager, “The Bilderberg Model of the Photosphere and Low Chromosphere”, Solar Physics 3, issue 1 (1968) pages 5-25]:

    http://adsabs.harvard.edu/full/1968SoPh….3….5G

    Wikipedia reports that Henry Kissing was a participant of Bilderberg in 1957, 1964, 1966, 1971, 1973, 1974, 1977, 2008, and 2011

    http://en.wikipedia.org/wiki/List_of_Bilderberg_participants#Presidents

    With kind regards,
    Oliver K. Manuel
    Former NASA Principal
    Investigator for Apollo

  2. JMD August 6, 2011 at 12:57 pm #

    If I had money to wager, it would be on this ‘shocking’ news sending UST & other government bond yields lower (prices higher) on the expectation of the Fed & other central banks buying.

    I wouldn’t be surprised to see the gold price drop further as the moronic speculators ‘profit’ by front-running central banks, selling gold to buy bonds.

    One day they will be caught holding the bag but I don’t think it will be monday.

  3. Team Oyeniyi August 6, 2011 at 8:26 pm #

    I read an article somewhere (I’m sure Google can still cough it up) suggesting that the USA was using the same economic policies as Zimbabewe did – and we know what happened there!

Comments are closed.

%d bloggers like this: