So S&P, one of the rating agencies that fuelled the bubble and bust, has downgraded US credit rating.\u00a0 Its about time.\u00a0 Not that the US isn’t wonderful, but its economic profligacy expanded to new levels in the last decade and the culture is becoming one of gratuitous consumption at the cost of future earnings.<\/p>\n
The king’s new clothes are not his and finally one of the courtiers has drawn attention to the fact.\u00a0 Everyone is dressed in robes they can not afford – the king’s new clothes are owned by someone else (China and other lenders to the US) and the king’s coffers are empty.<\/p>\n
Recognising the reality of consumption, debt, productivity and earnings is a step in the right direction.\u00a0 It is a good thing.\u00a0 It is good that the rating agency is doing its job.\u00a0 It’s good that our delusion is being revealed.\u00a0 It might be uncomfortable, but the sooner it happens the sooner we can fix the problem and change our behaviour.<\/p>\n
August is usually a volatile month with low trading volumes so let’s see what happens in September when bankers get back to “work”.<\/p>\n
S&P Report<\/a><\/p>\n BBC US loses AAA credit rating after S&P downgrade<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" So S&P, one of the rating agencies that fuelled the bubble and bust, has downgraded US credit rating.\u00a0 Its about time.\u00a0 Not that the US isn’t wonderful, but its economic profligacy expanded to new levels in the last decade and the culture is becoming one of gratuitous consumption at the cost of future earnings. The …
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