Categorized | National

Calm as Hindu Cows

 

 

US Credit Rating Placed on Negative Watch List  (VIDEO)

 

Skippy Massey
Humboldt Sentinel

 

Trapped in a flying illusion of safety, we meet Tyler Durden:
soap maker, connoisseur of explosives, and a great judge
of briefcases.  Mr. Durden cuts to the chase:

Oxygen gets you highIn a catastrophic emergency, you’re taking giant panicked breaths.  Suddenly you become euphoric, docile. You accept your fate.  It’s all right here.  Emergency water landing – 600 miles an hour.  Blank faces, calm as Hindu cows.”

And so does the average American see the economy:  Quantitative Easing, the dollar, and the tacking of our debts onto the national credit card.  It’s just like breathing pure oxygen.

Not everyone feels that way.  Take our lenders, for example.

dagong1Chinese rating agency Dagong Global Credit Rating Co., founded in 1994 and one of the largest and most respected firms in China, announced on Christmas Day that it has put the local and foreign currency sovereign credit ratings of the U.S. on a negative watch list.

China is the largest foregin owner of US debt with holdings of $1.2 trillion dollars in US Treasury securities.

“The squabbling between the two political parties on raising the US debt ceiling reflected an irreversible trend on the United States’ declining ability to repay its debts,” Dagong Chairman Guan Jianzhong said.

“The two parties acted in a very irresponsible way and their actions greatly exposed the negative impact of the US political system on its economic fundamentals,” he said.

“In regards to the US debt crisis, each political party is insisting on a proposition that is favorable for its own interests,” the Dagong company said in a statement on its website.  “Therefore, it will be difficult to form a long-term consensus on solving the debt problem,” it said.

dagong3The debt burden of the US federal government increased 9.1 percent year in 2011 and 11.7 percent in 2012, far exceeding the country’s nominal GDP growth rate of 3.9 percent in 2011 and 3.4 percent in 2012, Dagong said.
 
Dagong said it expects the outstanding debt of the United States to rise to 104.8 percent of its GDP– and 608.7 percent of its fiscal revenues by the end of 2012– indicating that our solvency is experiencing a descending trend.
 
“Due to the pending fiscal problems, the US economy is likely to fall into recession in 2013 and stay weak in the long-term which will further weaken the material basis for the government to repay debt,” their statement said.
 
Dagong downgraded both the local and foreign currency sovereign credit ratings of the US from A+ to A, each with a negative outlook.  The credit rating is identical to that of Spain’s.
 
The U.S. Securities and Exchange Commission has refused to recognize Dagong’s ratings because of the commission’s inability to supervise the Beijing-based agency.  To note, Dagong translates into English as meaning ’impartial and without prejudice’.
 
In its report, Dagong noted:
 
  • freedom2The partisan political conflict and lack of national debt management have pushed the creditworthiness of the federal government to the brink.  The decline of political decision-making will lead to weakened solvency.
  • With no fundamental plan and measures for solvency in place, the US government is lacking the willingness of debt repayment and the depreciation of outstanding debt, indicating a trend towards implicit default.  Quantitative Easing
    is leading to continuous credit expansion and maintaining consumption through borrowing, and taking advantage of the status of the US dollar without touching on the ultimate issue of willingness to repay.  Creditors have been suffering real losses from the consequent and persistent devaluation of the outstanding debt.
  • The deterioration of factors impacting the federal government’s solvency has further widened the degree of deviation between debt repayment sources and real wealth creation capability.
  • The US economy will probably fall into recession in 2013 and stay weak in the long term which will further weaken the material basis for the government to repay debt.  The US is facing an unprecedented crisis of excessive credit.  The inevitability and chronicity in the credit bubble burst will directly lead to the continued slump in total social consumption, triggering a chain reaction of long-term economic downturn.
  • DDagong2ebt limit lifting and debt monetization are becoming the long-term policy of the United States, and real solvency of the government will continue declining.  In order to avoid suffering an economic recession resulting from the unabated long-standing and excessive credit expansion, the US government has adopted an even greater unconventional credit expansion by dragging the country into a cycle of continuously lifting the debt limit to stimulate the economy by excessive issuance of the dollar.  As the resulting risks of dollar depreciation keep accumulating, the decline
    in real government solvency becomes persistent, and the vulnerable
    credit relationships bear increasing risk of breaking due to the occurence
    of emergencies and the debt limit.
Dagong concluded:
 
In summary, Dagong views that as the negative effects from key factors affecting U.S. federal government solvency– such as the debt repayment environment and wealth creation capability, debt repayment has been increasing.  Emergencies such as the fiscal cliff and the debt limit will further increase the vulnerability of government solvency.

Therefore, Dagong has put the U.S. federal government credit ratings on the negative watch list. Dagong will adjust the credit ratings according to the real circumstance to reflect the soundness of the U.S. federal government debt.

 
freedom1Partisan bickering and Quantitative Easing aside, we still have an ace in the hole for strengthening the dollar, paying our debts, and remaining calm.
 
Our military strength and the ability to use it.
 
With the United States as the largest manufacturer and distributor of arms throughout the planet– our number one domestic export product– there are new global territories to explore and expand into militarily and domestically.
 
We don’t call it colonialism or imperialism anymore.  It’s just a new way of doing business, a New World Order, as George H. Bush plainly said following the invasion and defeat of the Iraqi forces in Kuwait during the 1990 Gulf War.  His son George W. finished the job by beating Iraq down to its wobbly knees in the second Gulf War, taking out an evil dictator, and crippling a country while stabilizing the region’s oil producing capability for allied businesses.
 
As the dust settles on the Middle East we’re now setting our lofty sights elsewhere:  Africa.
 
treadHolder of 8-10% of the world’s energy resources and increasingly becoming our primary global source for oil and gas over the Middle East, we have plans for placing military advisors in 35 African nations soon– as the Associated Press reported last week.
 
That could strengthen the dollar’s depreciating position, relinquish our debt, and satisfy China and Republican neocons while maintaining our strategic dominance– while remaining as calm as Hindu cows.
 
 
 
 
 

One Response to “Calm as Hindu Cows”

Trackbacks/Pingbacks

  1. [...] We’ll be at the the point of no return:  unable to repay debts and further borrow, lenders not willing to lend anymore, treasury and bond markets defaulting, and the ‘full faith and credit’ of the US [...]


Leave a Reply

HumSentinel on Twitter

RSS Progressive Review

  • Bringing justice down to the community
    LA Daily News - City Attorney Mike Feuer announced plans Friday for a pilot program to involve community members in punishing offenders on quality-of-life issues.“It is part of a restorative justice theory, where the community should have restored to it what was taken from it by a perpetrator — and the community should see the tangible impact on the street.” […]
  • Milton Friedman: Killing American softly with his song
    Sam Smith, 2002 - You'd never guess it from the sycophantic obituaries, but Milton Friedman did more damage to American democracy and culture than just about any figure in the 20th century. The sycophancy isn't surprising. Friedman was blessed with it from the start. For example, the supposedly liberal PBS starred him in a ten part series, "Fr […]
  • How some states cheat minority voters
    Common Dreams - Lack of poll workers and low numbers of voting machines are key contributors to long voting lines, and precincts with more minorities experienced longer waits, according to a new study released today by the Brennan Center for Justice at NYU School of Law.Although many factors may contribute to long lines at the polls, little research has asse […]
  • Florida backs down on kindergarden testing
    Valerie Strauss, Washington Post - Last week I published a highly popular post that included a letter that kindergarten teacher Susan Bowles of Lawton Chiles Elementary School in Gainesville, Fla., posted on Facebook telling parents that she was refusing to administer the Florida Assessments for Instruction in Reading, or FAIR. She explained what she said we […]
  • Department of Good Stuff: Journalists
    Dean Baker Russ Baker Richard Brenneman Dan Froomkin Amy Goodman Glenn GreenwaldChris Hedges George Monbiot Bill Moyers John Nichols Greg Palast Robert Reich James Ridgeway Jeremy Scahill Tim Shorrock Jeff Stein Jon Stewart David Swanson Matt Taibbi Mark Thompson Sarah Van Gelder   […]
  • Department of Good Stuff: Good news
    You can't do better than Yes Magazine […]
  • Real economics
     An increase in GDP doesn't pay the cable bill […]
  • UN secretary general to join climate demonstrators
    Ban Ki-Moon, UN Secretary General - The Climate Summit that I am convening one week from today has two goals: to mobilize political will for a universal and meaningful climate agreement next year in Paris; and second to generate ambitious steps to reduce greenhouse gas emissions and strengthen resilience. We are anticipating an impressive turnout of leaders […]
  • Obama telling us one thing about ground troops, his generals another
    Nation - President Obama has repeatedly declared there will be no combat troops on the ground in Iraq to fight the Islamic State of Iraq and the Levant. But a Senate hearing Tuesday with top US military officials revealed that pronouncement is on very shaky ground—there is now no question ground troops are under active consideration at the highest levels of […]
  • The real economy
    Census Bureau & Federal Reserve […]
  • Ten ways to cut poverty
    Talk Poverty […]
  • Common Core trashs critics in ad
    Curmudgucation[Update: The video has gone away. The Youtube account "Common Core," a group of filmmakers from around the country, has shut down after only three days.]As your grandad would not say, "OMG!"The media group 617 has produced a video in support of the Core that is apparently intended to embarrass its opponents into silence. It […]
  • Pocket paradigms
    Laws should be handled like prescription drugs, but many of our politicians think of them as being more like popcorn or M&Ms -- something to munch on. This is unfortunate since much of America's success to date can be traced to one simple rule: don't make too many rules. Much of America's failure to date has come from ignoring this rule. - […]
  • Word
    To those who have hunger, give bread. To those who have bread, give a hunger for Justice. - Latin American grace […]
  • Recovered history: How newspapers can save themselves
    From 50 uyears of our overstocked archives Sam Smith, 2009  - It's been about 17 years since I last offered any advice to Don Graham of the Washington Post. He wasn't interested. Oddly, about a year later, the circulation of American newspapers, including the Post, began a slow decline that continues to this day.This morning, however, I was so stru […]