Open-ended questions as new world order emerges

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 stock markets.

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 treasury holdings.

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.

I fail to see any questions or issues being addressed that haven't been in all the other downgrade threads.

This drop in rating is more symbollic than anything else. I would hardly say it's going to effect anything much other than throwing out almost every member of the Senate and Congress and the President in the next election which is a good thing in my opinion.

Most people analyzing this are not too worried about it yet.

Originally posted by surrealist
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 stock markets.

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 treasury holdings.

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.

That's on a Murdoch website too. He's one I thought would have been right in there trying to be part of it. Hmmz.