Thread: AAA Ratings or Not, US Bonds Are Toast

AAA Ratings or Not, US Bonds Are Toast

Author: Mac Slavo- April 7th, 2011
18 Comments

For years it was only within the sphere of conspiracy theory and contrarian news. But a downgrade of US debt is becoming more likely as budgetary and monetary problems come to a head.

The debt ceiling debate in Congress is really nothing more than a distraction. The government will not shut down simply because just about everyone knows Congress will eventually raise the ceiling to absorb even more debt. A week or two delay is no big deal. Very few of our elected officials are prepared to take the necessary steps and the subsequent immediate pain that would follow an outright refusal to increase our debt borrowing capabilities.

But what the current budget and spending debate highlights is something worse than just the possibility of a temporary government shutdown.

Tim Geithner’s letter to Congress regarding the debt ceiling in January of 2011 made it clear that We’re Literally On the Brink of Catastrophic Collapse. http://www.shtfplan.com/headline-news/c ... e_01062011

While a temporary government shutdown may delay some services and entitlement payments, paychecks for soldiers and processing of IRS taxes, it is nothing compared to what would happen if the US government were to lose its AAA bond status.

RT and economist Max Fraad Wolff explain:

It would create global shock waves, in part because most models and understandings of the global investing landscape, including the bond landscape, take as their central anchor the US 10 year Treasury bond as a risk-free asset.

Video: US losing AAA rating? http://www.youtube.com/watch?v=KOYiIJIl ... r_embedded

Hat tip Daily Bail

Some argue that because the United States has the privilege of printing the US dollar, no such downgrade will ever take place. We are, after all, the reserve currency of the world, and a downgrade is simply not a possibility, according to the experts.

Within the context of this argument it is important to remember that the ratings agencies responsible for giving US bonds a AAA credit rating are the very same agencies that rated mortgage backed securities, which just so happened to be loaded with toxic paper, the same risk-free status. Nonetheless, those so-called investments were nothing more than another Wall Street Ponzi scheme designed to plunder large financial institutions and individual investors alike.

Thus, a AAA bond rating doesn’t really mean what it used.

Even while those mortgaged backed securities and other alphabet investment vehicles held triple A ratings, the entire financial system was imploding around them when investors realized that they didn’t actually hold risk-free assets, but rather, worthless paper. It didn’t take a ratings agency’s downgrade to send global markets into a free-fall.

The US dollar may very well be worth about as much as those risk-free assets of 2007. What will it matter if purportedly “independentâ€

are ya awake yet America

Silver hit $39.97.