15 January 2008

Moodys to down grade US Treasury notes

The Labor Department reports that inflation rose 6.3 pct in 2007, the largest calendar year gain since 1981. Inflation rose 7.2 pct in the year through November. Portentous? Are we going the way of Ancient Rome? Some would say yes. The parallels are there: a detached elite ruling class, porous borders with unchecked immigration, economic malfeasance and a delinquent and disaffected middle class. If you read journals of Romans who lived around 300 AD, you'll see that most were writing about absolutely mundane matters: what they ate for the day, where they traveled, the weather, and who they met that day. They were oblivious to the impending implosion that would eventually arrive in the form of Alaric, King of the Visigoths. The Mexicans are our version of the barbarian hordes. We must beat them back and get control of our government spending.

Patrick J. Buchanan writes a persuasive piece on the woes of the current subprime mortgage market.

Since it began to give credit ratings to nations in 1917, Moody's has rated the United States  triple-A. U.S. Treasury bonds have been seen as the most secure investment on earth. When crises erupt, nervous money seeks out the world's great safe harbor, the United States. That reputation is now in peril.

Last week, Moody's warned that if the United States fails to rein in the soaring cost of Social Security, Medicare and Medicaid, the nation's credit rating will be down-graded within a decade. [see "US's triple-A credit rating 'under threat', Financial Times, January 11 2008]

Our political parties seem oblivious. Republicans, save Ron Paul, are all promising to expand the U.S. military and maintain all of our worldwide commitments to defend and subsidize scores of nations.

Democrats, with entitlement costs drowning the federal budget in red ink, are proposing a new entitlement—universal health coverage for the near 50 million who do not have it—another magnet for illegal aliens. Moody's is telling America it needs a time of austerity, while the U.S. government is behaving like the governments we used to bail out.

Citigroup has posted a 4th quarter loss of 9.83 Billion - the last time they lost money was 1998. With write-downs and credit costs, the loss could exceeed 18.1 Billion.

As Buchanan points out, globalism is contributing to the problems we're seeing with this. Foreign investors have been systematically purchasing US interests. WIth our debt load, and with highquality goods being dumped into the US from Japan, we have been mortgaging our future.

We're now going to pay the price.

Citicorp got a $7.5 billion injection from Abu Dhabi and is now fishing for $1 billion from Kuwait and $9 billion from China. Beijing has put $5 billion into Morgan Stanley and bought heavily into Barclays Bank.

America is prostituting itself out to the highest bidders. Check out this story that shows just how China has a gun to our head.

So who do we have to blame for this? It falls on both sides of the aisle but a burgeoning social welfare system is contributing to it. We're great at giving, but terrible at trimming.

What we need is better efficiencies in our markets and less government regulations. At this tenuous moment in our fiscal history, do you really want to elect a president who promises a National Healthcare plan which would suck hundreds of billions of dollars out of your collective pockets?

No thanks!


leftisthebest said...

I'll give you credit Rue-y, unlike SCC you'll throw numbers even if it disgraces the Commander-in-Chief.

This country is headed for some deep, deep financial troubles. The present Commander-in-Chief may just be gone by the time the worse arrives.

Trim the social system you say? Well, in the words of Teddy Roosevelt, "Bully, Bully." Or was that Colonel Kit Coyote from the old "Go Go Gophers" cartoon? No matter, you get the point.

We can spend billions and billions of dollars on foolishness in Iraq, but when it comes to helping the poor, like the old Starkist tuna commercial, "forget it Charlie."

Rue St. Michel said...

Hey - the "poor" get plenty of help! I would say TOO MUCH help.

The Nanny State is what is sucking us dry. The educational system and entitlements are the biggest expenses we incur.

The war budget pales in comparison.

Anonymous said...

The end is near, bankruptcy of the city and state is coming soon. Your pension fund will be broke and gone....

Joe Cassidy says said...

The Canadian dollar is now more than the yankee dollar.

Coldtype said...

"One-time tax rebates! Oh, awesome. Let me tell you, a few hundred bucks is going to restore my confidence like a clock-eating drive late in the 3rd Quarter. So what if our entire economy is a landfill of unrecoverable debt sitting on top of a lot of second-rate infrastructure with an energy crisis looming on the near horizon? Blood under the bridge, baby. I'm a-gonna buy me some consumer electronics and save America!"
-Who Is IOZ

I really couldn't have said it better.

Billybob Thorton said...

The money you spend is on goods made overseas, the Union labor contracts have just run all the work out of this country. The workers here just don't got it.