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State Dept. Briefing for Foreign Reporters: ‘We’re Going to Get Downgraded’
#1
http://cnsnews.com/news/article/state-de...downgraded

(CNSNews.com) - An economic analyst invited by the State Department to brief a group of foreign journalists on the U.S. economy on Election Day responded to a question from a reporter from the Egyptian newspaper Al Wafd by predicting that U.S. Treasury securities—the means by which the U.S. government finances its debt--will be downgraded again.

On Aug. 5, 2011, three days after President Obama signed legislation increasing the U.S. government debt limit by $2.4 trillion, Standard & Poors downgraded U.S. Treasury securities from its highest grade of AAA to AA+. Prior to that, U.S. government debt had always maintained the highest rating.
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#2
Pocketprotector;39197 Wrote:http://cnsnews.com/news/article/state-de...downgraded

(CNSNews.com) - An economic analyst invited by the State Department to brief a group of foreign journalists on the U.S. economy on Election Day responded to a question from a reporter from the Egyptian newspaper Al Wafd by predicting that U.S. Treasury securities—the means by which the U.S. government finances its debt--will be downgraded again.

On Aug. 5, 2011, three days after President Obama signed legislation increasing the U.S. government debt limit by $2.4 trillion, Standard & Poors downgraded U.S. Treasury securities from its highest grade of AAA to AA+. Prior to that, U.S. government debt had always maintained the highest rating.

First downgrade didn't matter at all. Europe was tanking and stock market was tanking so everyone bought treasuries regardless as a flight to safety. Another downgrade probably won't matter either. What else are investors going to buy? Southern European bonds are potentially worthless and Northern Europeon bonds are expensive.

Eventually it will matter of course. At some point, confidence will be lost, interest rates will go up, and bond holders will be slaughtered.
Deal_me_in, proud to be a member of pa2a.org since Sep 2012.
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