US Credit Faltering: The End is Near

It is very interesting reading recent articles about the US credit rating. Last week we got:

'PIMCO has shifted to a short position in U.S. government-related debt in the world's largest bond fund, while also raising cash holdings in a sign of the asset manager's serious concerns about the U.S. fiscal outlook.'

'For PIMCO, the world's largest bond fund, the picture had become bleak enough to prompt it to announce in February it had sold all U.S. Treasuries in its $236 billion Total Return Fund.'

Bill Gross, PIMCO's chief investment officer, said he expected interest rates to climb, the dollar to fall and the United States to eventually lose its AAA credit rating.

Today we get:

'Standard & Poor's threatened Monday to downgrade the United States' prized AAA credit rating unless the Obama administration and Congress find a way to slash the yawning federal budget deficit within two years'

You can only fudge the numbers for so long. It's only a matter of time till US debt holders call their notes and when this happens we will see the colapse of the US financial system.

news.yahoo.com...
www.reuters.com...

reply to post by Blood Royal


It's going to be fun >

No seriously, will it not be awesome not going into work, and getting to hear the news about the financial system murdering itself?

Well.. school in my case, but exponential growth is impossible, it had to happen sooner or later.

Originally posted by WillNiendick
reply to post by Blood Royal

 

It's going to be fun >

No seriously, will it not be awesome not going into work, and getting to hear the news about the financial system murdering itself?

Well.. school in my case, but exponential growth is impossible, it had to happen sooner or later.

Probably won't be as much fun for people who have to pay bills and put gas in their car

reply to post by Hawking


Tell me about it, it costs me over $120 to completely fill my pickup. Thankfully, though, it's warming up in CT so I can begin riding my bike again.

These articles are saddening, but this isn't a shock of any sort. We all knew this was coming, we were told this was coming. Our AAA rating will fall - look at our Congressmen's efficiency so far this year. . .

Our government almost shut down because they couldn't decide on a budget. Now a raised debt ceiling. You think they can actually cut the deficit? The MSM was toting a slash of, what, $32billion? The truth is that by the end of the year we will still be another $1trillion+ in debt.

I'm not sure how much their ratings matter. I think they gave all those crappy mortgages AAA ratings during that real estate mess.

reply to post by WillNiendick

With all the wars, debt and corruption it appears imminent. I often wonder if when we have a melt down how bad it will get. Will it be chaos or will people be civilized. My bet is that there will be chaos. If there is a meltdown, I will probably try to find a place where there aren't to many people, so my family will be somewhat safe.

Bloomberg

Soooo....?

Japanese policy makers signaled their commitment to holding Treasuries after Standard & Poor’s lowered its outlook for the U.S.’s AAA credit rating to “negative” for the first time yesterday.

reply to post by Konah


The debt is so far out of control that it is only a matter of time till the whole thing explodes. It like the government tries to put a band-aid on wound that need stitches.

China’s farmland shrank by 8.33 million hectares (20.6 million acres) in the past 12 years, Premier Wen Jiabao’s top agriculture adviser Chen Xiwen told reporters March 24.

Here they are relying on us for food imports.

Link Stuff

reply to post by Blood Royal


I suspect there will be 3 groups of people and activity. 1. The group that is totally dependent on the system - they will go nuts and be all over the streets and worse (look at New Orleans after Katrina). 2. There will be a group of folks that have enough to ride it out, and will have to defend themselves from group 1 and help out their neighbors who are less fortunate (look at Mississippi gulf coast after Katrina) 3. The elite/martial law insiders will be living nice in their safe havens and laugh at the rest while rolling out the NWO.

There will be spending cuts , there will be a rise in intrest rates and bankruptcies and if they chose to print there way out of it we will see hyper inflation .
Oh , and did I forget to mention, they will be coming for your guns and once they have them they will go for your gold .

reply to post by onequestion


If I was the Japanese I would say anything to appease the US right now. Especially since my country is in meltdown mode.

S&P sounds alarm on US debt

The agency kept America’s credit rating at triple A but for the first time since it started rating US debt 70 years ago, cut its outlook from “stable” to “negative”. A negative outlook means there is a one-third chance of a downgrade in the next two years.

But here's the real concern....

Doubts about US creditworthiness could threaten the dollar’s use as a global reserve currency amid the rise of rivals such as China that have better growth prospects and fewer fiscal challenges.

Given other challenges the USD as reserve currency is facing, the outlook doesn't look too good.

www.ft.com...

Originally posted by Blood Royal
reply to post by onequestion

 

If I was the Japanese I would say anything to appease the US right now. Especially since my country is in meltdown mode.

Exactly!

reply to post by surrealist


I wonder what it would take to cause most nations to shift their currency of choice? Will it change when the whole thing falls apart?

The US dollar has been pretty resilient for the past week or so the index hovering around 75. I was expecting higher interest rates to start a dollar rally. Fuel prices are close to all time highs again so if the Fed has some hidden tricks to support the dollar, now would be a good time to use them.

I think the credit rating threat was cosmetic and only due to the uncertainty of possible future budget and federal reserve actions.

Originally posted by Blood Royal
reply to post by WillNiendick

 

With all the wars, debt and corruption it appears imminent. I often wonder if when we have a melt down how bad it will get. Will it be chaos or will people be civilized. My bet is that there will be chaos. If there is a meltdown, I will probably try to find a place where there aren't to many people, so my family will be somewhat safe.

Dont do that chaos is only temporary. Patterns always emerge when you graph any system. What would most likely happen is TPTB would just tell Americans they need to adopt a new currency like the amero to compete in the global economy and threaten and threaten government shutdown if we dont accept it. Thats when we as a nation need to come together and tell the Federal Reserve were not going to pay them anymore of our debt and we are going to just start printing our own money.

Originally posted by Hawking
Probably won't be as much fun for people who have to pay bills and put gas in their car

Much of the bills go to the financial industry.

If the financial sector implodes, we will recover very fast, so long as the government doesn't try to bailout anyone. The United States is a rich land full of wealth potential. Getting rid of the financial industry will be be the best thing to relieve this country.