Egan Jones Downgrades US Credit Rating AGAIN

Another Credit Agency Downgrades US
by William Bigelow
Credit rating agency Egan Jones downgraded the United States Thursday on concern over the sustainability of public debt. Egan Jones is one of the most important ratings firms in the world; they lowered our credit level from AA+ to AA. The firm reduced America from AAA to AA+ in July 2011, just before Standard & Poor's did the same.

Egan Jones warned. "Without some structural changes soon, restoring credit quality will become increasingly difficult . . . without some structural changes soon, restoring credit quality will become increasingly difficult." They added that there was a 1.2% probability of U.S  default in the next 12 months.  The company cited the fact that the US’s total debt, which now equals its total GDP, is rising and soon will eclipse the national GDP; the company sees the debt rising to 112% of the GDP by 2014.

Read more: http://nation.foxnews.com/us-credit-rating-downgrade/2012/04/06/egan-jones-downgrades-us-credit-rating#ixzz1rYEP32Ql

WSJ: Fed Buying 61 Percent of US Debt

Don't expect interest rates on savings deposits to rise at all over the next several years, or more, if the Fed keeps on buying up the majority of US Treasuries at this rate. And most likely they will, since no one else seems to want them anymore.Julie Crawshaw and Forrest Jones at MoneyNews give us this recap of the original Lawrence Goodman WSJ article here: Federal Reserve Propping up US Economy and presents a dire scenario. In the original article at the WSJ by Goodman Demand for U.S. Debt Is Not Limitless  (Possible Paywall) he makes the point that " Federal Reserve purchases of Treasury debt mask reduced demand for U.S. sovereign obligations." this creates the impression of stronger demand for US debt  and could be especially dangerous.

In consensus, Crawshaw and Jones make the point that the Fed, by propping up the treasury sales, may be delaying action on fiscal responsibility, perhaps even postponing "serious attempts to curb spending and narrow its gaping deficits" by the US Government.

"Without foreign buyers and a shrinking base of U.S. corporate and bank buyers, the Treasury has had to resort to the Federal Reserve itself to make the purchases. The Fed purchasing not only makes up the shortfall, but can keep long term interest rates artificially low."

So for now don't wait for the banks to start offering any reasonable interest rates soon, and look to the market for investments in solid stocks. But take care, the bulls are here for a short term, leading up to the elections. Then pay attention, because the results of this one will determine the financial future of not just this country, but of the world.

Obamacare: New $17 Trillion Shortfall Found.

It just keeps going up, up and away. Just days after the Supreme Court heard arguments for and against Obamacare, or the Affordable Care Act, a new review finds a shortfall of over $17 Trillion, more than the total of the National Debt today (around $15 Trillion). The pricetag on this legislation seems to increase almost daily in recent weeks, as we find out more about it. Clearly, massive tax increases will be required to finance it. Seems Nancy Pelosi was right, after passing it we are still finding out what is in it. This whole situation is a shame, there was a lot of good in the bill, unfortunately, there also seems a be a lot more bad in it. Read more: Surprise! Obamacare New Shortfall is $17 Trillion!

China Owes the USA Billions of Dollars - refuses to pay!

This is amazing, and I was not aware of it previously. China has violated International Treaties by failing to pay USA Bond Holders of Chinese Government issued bonds. China refuses to pay either the interest, nor the principal on these secured guarantedd bonds. And by the way, they did pay off the bonds to Great Britain bond holders, but NOT the USA bond holders. Find out why here:  Chinese Defaults on Bond Debt to USA