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Will America lose its AAA credit rating?
flotsam bbs.chinadaily.com.cn Updated: 2005-05-25 14:39 The world's worst debtor has
the best credit rating possible. How IS this possible?
When Nixon defaulted on gold payment in 1971, the world was faced with a
dollar standard with absolutely no specie currency backing it. This was currency
supported only based on the faith of the US government; faith-based currency!
Hallellujah!
But since the advernt of the Euro, the dollar has lost one of its main
reasons for people to support it. If Saddam had been allowed to exercise Iraq's
sovereign right to price oil in Euros, America would have lost another reason.
The third reason is the Pentagon, but the US can only bully small nations. Up
against a major power, there would be no winners.
Now, credit agencies have downgraded Ford and GM (by some measures, America's
largest company). Warren Buffett's Berkshire Hathaway has also been downgraded.
The excuse is Buffett's age of 74 with his partner being 81. Berkshire shares
are no doubt selling at a premium because of the duo's performance and
replacements for them are not on the cards.
However, there is another explanation which would bring these anecdotes
together. Since companies rarely have a higher rating than their host country,
the downgrades could well be in preparation for downgrading the US of A. It
certainly wouldn't be before time!!!!
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