U.S. rating faces 2013 cut if no credible plan: Fitch

U.S. rating faces 2013 cut if no credible plan: Fitch

www.reuters.com

"The United States is the only country (of four major AAA-rated countries) which does not have a credible fiscal consolidation plan," and its debt-to-GDP ratio, or how much debt it has relative to the size of the economy, is expected to increase over the medium term, Ed Parker, sovereign ratings analyst, told a Fitch conference in New York.

Lower credit ratings typically lead to higher borrowing costs, putting more strain on government balance sheets already straining to cut spending without sending their economies into a tailspin.

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Yet another dire warning that will certainly send up the panic flags around the economic world. How sad is it that out of the final 4 AAA economies ONLY the United States lacks a cohesive plan going forward? Our 'leaders' are too busy worrying about the wrong things and ignoring the 800 lb gorilla in the room. If we don't get our collective acts together and start making some hard decisions then the US is in for dire times indeed.

www.reuters.com
(visit the link for the full news article)

Yep. I had a Bank Official tell me that they plan to take the dollar down in February of 2013, and that they could delay it if a new president was elected to see if they make strides in new fiscal policy that reduces the debt. The current state of spending and increasing the deficit will not be allowed to stand. I was rather shocked when he told me this because I asked him when does he think the cards would collapse back in April. He immediately said, "Feb. 2013". I wasn't expecting they had a plan to do it. Anyway, this sounds right in line with what Fitch said.

reply to post by spirit_horse


By 'take the dollar down", do you know what he meant? Was he saying there was another currency ready to take it's place?

I'm intrigued...

Thanks for the response and information.

I am not sure. We were in the middle of being judged in a competition and didn't really have time to talk extensively. But what I got was they were not going to keep the dollar's value up with the current spending, borrowing, and the fed printing money to pay debts the dollar would collapse. I don't know enough about the workings behind the banks. If they won't buy the treasury bonds, dump their dollars for other currency, etc. I suppose they could cause the dollar to lose a lot of value or collapse it.

The thing I wonder is what the effect of Greece, Italy, and Spain will be on the Euro. Perhaps they will change their plans. But, with the US Debt climbing like it is, if countries stop buying treasury bonds (I guess a countries central bank?) they could collapse the dollar. The thing that suprised me was the fact he had basically a date that they were conspiring to make a major move i.e. Feb. 2013. The bank in question was the Bank of England.