posted on Aug, 7 2011 @ 06:41 PM
Open-ended questions as
new world order emerges
THE decision by ratings agency Standard & Poor's to downgrade the US's credit rating from AAA to AA+ with a negative outlook is another
powerful indicator that the world order is changing, perhaps faster and more profoundly than some Western governments have grasped. Such
ignominy would have been unthinkable two decades ago after the Berlin Wall was torn down and the wealth and strategic might of the biggest economy the
world has ever seen looked unassailable. The downgrade is significant not only because of the size of the US economy, but because, around the
world, US Treasury debt is such a widely held investment, with 46 per cent foreign-owned, compared with 1 per cent in 1945. China, the largest
foreign holder of US Treasuries, rubbed salt into the US's wounded pride with a tart rebuke to put its house in order to safeguard Chinese dollar
assets. Just how negative, or mild, the impact of the downgrade on markets, capital flows and US borrowing costs remains to be seen, but it has
compounded economic gloom.
Thought I would post this in this sub-forum as it directly relates to the US credit-rating downgrade and potential impacts on world economies and
Now I didn’t know so much US treasuries were foreign owned (46 per cent?). That is a lot so I guess concerns over the downgrade are very legitimate
if this is true. China as we have already seen, have sharply criticized the US over its spending and called for the WH to be responsible with its
Such concerns and doubts could start to see some sharp selling, sooner or later, especially if the US fail to get their spending together, which
during an election year, would prove to be extremely painful to the government.
How the world reacts to news of the downgrade is yet to be seen, though we are seeing some major activity on the share markets today (AEST) as NZ has
opened and now fallen by over 3 per cent. Australian markets are set to open at 10.00am (AEST) which is in less than 20 minutes time as I write.