Good to see a Credit Rating Agency recognise that America is no better than Greece.
Only last week I said the US would be downgraded later this year. I was assuming the CRA's would be as slow as snails and follow the downgrade after the event Lehman style. Looks like one of them, S&P, was on the ball. Hats off and respect. The CRA's are back in business.
With US debt now playing second fiddle to Australia and the Isle of Man, all this liquidity talk is baffling. Yep, the risk free has always been T-Bills. But no more. Gold now takes its place.
Anyway, who is next for a downgrade?
UK and France for starters. Next week probably.
The arrogance of Obama has been staggering and since the days I saw him on the road courting hedgies for election cash, I have warned you all about how useless he is. And so he is the first American president to oversee a downgrade. The man should resign immediately.
But it seems he thinks everything will be fine. So what if Canada and Australia, France and Germany are now number 1? So what if US money market funds are second class? So what if raising debt will cost more? America is America. Number 1. Reserve currency of the world. Super power.
Soros and Buffet and many other Americans are saying it doesn't matter. Jeez, what planet are they on? You cannot have a rating system and just ignore it. What if Basel decided all tier 1 capital for the banks had to be Triple A debt? Oops, no need for American subprime crap.
Anyway, this is the beginning of the end of America. Unless of course the CRA's get in there and downgrade France and the UK and Australia and Germany and the Isle of Man, and then America will be in good company. Until then it is no better than Greece.
America is now an emerging market (bloomberg)
Greenspan, the man who got America into the mess it is in, says its business as usual (reuters)
The really useless TG decides to stay and cause more chaos (reuters)
Europeans in chaos decide to have a conference call (bloomberg)
Obama's new election slogan "I can get back America's triple A"