Rich Nations May Face Junk Status by 2030s - S&P

http://www.stuff.co.nz/stuff/manawatustandard/0,2106,3224562a6410,00.html

22 March 2005

LONDON: Rising healthcare and pension costs could push sovereign debt ratings on some of the world's rich nations to junk status in 30 years unless they tighten their fiscal belts, Standard & Poor's said in a report.

The rating agency said without further adjustment to current fiscal situation or to social security and health costs, the government debt-to-GDP (gross domestic product) ratios of France, Germany and the US will surpass 200 per cent of GDP by the 2050.

This would mean their sovereign ratings could be in line with those of speculative grade nations.

"By the 2020s, the downward pressure on ratings would greatly accelerate and by the late 2030s, all but Italy would drop below the investment grade divide," the rating agency said in a report released on March 18. "It needs to be stressed that this scenario is not a prediction by Standard & Poor. It is highly unlikely that governments will allow debt and deficit burdens to spiral out of control in the manner outlined above," it added.

. . .

to tell the sovereign governments of the world what to do?

Governments are not really "sovereign" if private bankers hold sway over them like this.

Any time nations takes over from the private central banks deputized by the Powers That Be to run them, "sovereign" leaders begin to be assassinated and wars are declared on these nations.

The financial cartel calls these "rogue nations" and usually wind up, as a last resort, ordering the U.S. military to take them down.

I am trying to imagine the US economy in 2050.
It doesn't run on the same engines that it does now.

Productivity will be revealed as a major difficulty
How do you manage an economy when there are not enough jobs dumb and slow enough for humans to do. There will be a class of high skill jobs requiring human workers, but I bet they will be rare.

I suspect that a lot of agriculture will be intensive, as the new CO2 heated climates will be too volatile to leave crops un-attended.
The ammonia will have to be made the old way, decomposition.

No vechicle will run on internal combustion that isn't hydrogen.
So go ahead, tell me what Italy's bond ratings will be like in 2050...

:7 That's funny!

"not enough jobs dumb and slow enough for humans to do"

Seriously, that's hilarious! Thanks for making me laugh today!:)

that they are not about to arrest with this year's budget, which includes at this point even more numbskulled tax cuts.

Recall that Bush inherited a US government with the gold standard of credit ratings and a huge budget surplus (thank you, Bill Clinton for your fiscal responsibility).

Now George Bush is going around the country bad-mouthing our government bonds, implying that he is going to default on 2 Trillion in Treasury debt held by the Social Security Trust Fund, and doing nothing but encouraging the growth of our record deficits and national debt.

The ECB standard of .03 deficit/GDP ratio makes the current United States government look like a meth-addicted slot-playing deadbeat dad. Is it any wonder S&P starts firing warning shots about the quality of US Government credit across our bough when Bush has been going around the country badmouthing US government debt as he continues to rack it up at a record pace?

S&P may wait until 2030 to drop the US credit rating to "junk," but they may just drop it to AA from AAA in a year or two. Think about what that would mean over the next few years: interest rates higher by a few percentage points, big scarcity of credit, probable recession, and a bigger-than-ever revolving credit trap for US businesses and consumers.

To bitch about the power of a ratings agency over "sovereign" governments or to opine that some new economic paradigm will blow these concerns away by 2050 is to miss the point (in that more-common-than-ever DU way) entirely.

Bush and his Republican Congress have made a huge mess with buddy-buddy tax-cuts and incontinent spending, a mess that they have no will at all to clean up. And the world of investors is going to start asking for a lot better return if Bush and the Republicans keep upping the risks. And you and I will pay for this in more ways than one.

Hell, ask Noam Chomsky. He predicted this shit years ago.

Who appointed Standard & Poor god of the financial world and who decided financiers should force their own solutions on "sovereign" governments?

Examine the foundations of our money system too closely and you will wind up very dead, especially if you try to do something about it like JFK did.

We've been going downhill ever since. The Bretton Woods structure is beyond repair and the frenzied drive for more globalism financed by a rotting financial superstructure is doomed to failure.

And the rest of us are apparently doomed to live under tyranny while the financial cartel makes its futile attempts at world domination at the point of the U.S. military's guns.

either don't buy bonds (which I presume you don't), or buy bonds whose creditworthiness hasn't been evaluated by Moody's or S&P. I would certainly not deny you either apparent privilege.

capital on fire