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If The U.S. Government Loses Its AAA Rating It Could Potentially Unleash Financial Hell Across The United States

For decades, the U.S. government has had a AAA rating.  On the scales used by the big three credit rating agencies, that is the highest credit rating that a government can get.  Moody’s scale actually uses lettering that is a little different from the other two big agencies (“Aaa” instead of  “AAA”), but you get the point. Right now, the U.S. government is closer than ever to losing its AAA rating.  The threat of a rating downgrade is going to continue to grow regardless of how the political theater that we are watching unfold in Washington D.C. plays out.   The truth is that the federal government has accumulated a debt that is so vast that it will never be paid back.  In fact, we are rapidly approaching the point when this debt will no longer be serviceable.  If the credit rating of the U.S. government is not slashed right now, it will be soon enough.  In fact, the truth is that the U.S. government is such a financial mess that it should have been done long ago.  But whenever the United States does lose its AAA rating, we could potentially see financial hell unleashed because it will also mean that there will almost certainly be a wave of credit rating downgrades from coast to coast.

As I have written about previously, government debt becomes more painful the higher that interest rates go.  When the big credit agencies downgrade the credit rating of a government, that is a signal to investors that they should ask for higher interest rates on debt issued by that government.

This does not always play out in practice (just look at Japan), but nations such as Greece, Portugal and Ireland sure are going through financial hell right now as they deal with reduced credit ratings and soaring interest rates.

Right now, the U.S. government is able to borrow gigantic quantities of money at ridiculously low interest rates. This is the primary reason why the debt disaster predicted by so many in the past has not arrived yet.

If the credit rating of the U.S. government is downgraded, it could finally get investors all over the world to realize that the game is over and that they should be demanding much higher returns on debt issued by the U.S. government.  The truth, as U.S. Representative Ron Paul put it recently, is that the U.S. government is already “insolvent” and at some point we are all going to have to face reality….

“Ultimately, the fundamentals show this country is bankrupt.”

So whether or not it happens right now, the truth is that at some point the credit rating of the U.S. government is going to go down and interest rates are going to go up.

Unfortunately, it appears that this might happen sooner rather than later.

Earlier this week, Moody’s Investors Service publicly announced that it would be reviewing our Aaa bond rating for a possible downgrade.

On Thursday, S&P actually went so far as to announce that there is a “50 percent chance” that it will downgrade the credit rating of the U.S. government within the next three months.

S&P has been warning of trouble for some time now.  Back on April 18th, Standard & Poor’s altered its outlook on U.S. government debt from “stable” to “negative” and warned that a downgrade was likely at some point soon if nothing changed.

If the credit rating of the U.S. government gets slashed and if that results in higher interest costs on the national debt, that is going to make it much harder to balance the budget.

The U.S. government will take in somewhere around 2.2 or 2.3 trillion dollars this year.  It will spend somewhere in the neighborhood of 3.5 or 3.6 trillion dollars this year.

Included in that spending is about 400 billion dollars that goes for interest on the national debt.

As I explained in a previous article, if our interest costs double or triple it is going to make it basically impossible to balance the budget under our current system.

If interest rates on U.S. government debt were to rise to moderate levels, we could soon be easily paying a trillion dollars a year just in interest on the national debt.

If interest rates on U.S. government debt were to rise to the levels that Greece, Portugal and Ireland are now facing, it would be beyond catastrophic.

But a reduced credit rating and higher interest rates would not just hurt the finances of the U.S. government.

Any financial institution that is linked to the U.S. government in any way would also probably be downgraded.

This fact was noted in the announcement put out by Moody’s this week….

In conjunction with this action, Moody’s has placed on review for possible downgrade the Aaa ratings of financial institutions directly linked to the government: Fannie Mae, Freddie Mac, the Federal Home Loan Banks, and the Federal Farm Credit Banks.

We have also placed on review for possible downgrade securities either guaranteed by, backed by collateral securities issued by, or otherwise directly linked to the government or the affected financial institutions.

Just think of the financial carnage that would cause.

Also, check out what one Bloomberg article had to say about the potential cascading effects of a credit rating downgrade for the U.S. government….

At least 7,000 top-rated municipal credits would have their ratings cut if the U.S. government loses its Aaa grade, Moody’s Investors Service said.

An “automatic” downgrade affecting $130 billion in municipal debt directly linked to the U.S. would occur if the federal level is reduced, Moody’s said yesterday in a report. Additionally, top-rated securities with no direct links to the national government will be reviewed for similar action.

But the nightmare would not end there.  The truth is that the credit ratings of large numbers of state and local governments from coast to coast would likely be reviewed and downgraded as well.  Right now, many state and local governments are scratching and clawing in a desperate attempt to survive financially, and a significant rise in interest costs would be enough to wipe many of them out.

The ripple effects of a U.S. government credit downgrade would be endless.

A lot of people argue that if the federal government ran a balanced budget from now on none of this would matter.

Unfortunately, that is not true.

At this point, a very high percentage of U.S. government debt is short-term debt.  That means that gigantic amounts of debt must be “rolled over” each year in addition to any new debt that we take on.  So even if interest rates rise significantly on just the existing debt that we have it is going to be a total nightmare.

And make no mistake, whether it happens now or later a collapse of U.S. government finances is coming.

David Murrin, the chief investment officer at Emergent Asset Management, recently told CNBC the following….

“It’s inevitable that the U.S. will default—it’s essentially an empire which is overextended and in decline—and that its financial system will go with it”

Right now it is being projected that the U.S. national debt will hit 344% of GDP by the year 2050 if we continue on our current course.  We are on a runaway train that is heading straight for a brick wall.

Europe is also a complete financial wreck.  The sovereign debt crisis over in the EU continues to grow worse by the day and there is no end in sight.

If the U.S. collapses, Europe is not strong enough to save it.  If Europe collapses, the U.S. is not strong enough to save it.

We really are entering an unprecedented time in world history.   We are on the verge of the first truly global financial disaster.

It is going to be interesting to see which major currency crashes and burns first.  Some think that it will be the euro.  Others think that it will be the dollar.

In any event, the reality is that the current global financial system is not sustainable.  The folks that are in charge can try to keep things together for as long as possible, but at some point the dominoes are going to start to fall and the house of cards is going to crash.

We have entered a time when there is going to be financial crisis after financial crisis.  Even if the EU and the U.S. government can somehow fix things for the moment, more problems are going to be just around the corner.

The world has become incredibly unstable and the entire globe is going to be shaken.  Most people cannot even conceive of the kind of financial hell that is coming our way as a nation.

Yes, it can be a bit sad to think about what is happening, but it is much better to be armed with the truth than to be totally clueless and totally unprepared.

  • http://www.youtube.com/user/zedgehero Zedge Hero

    Great article as always! And they wonder why gold is almost 1600 an ounce. Covering the FED, AAA rating, and gold going through the roof in this weeks episode with the C-Span video of Ron Paul drilling Bernake.

    http://www.youtube.com/user/zedgehero

    • Cheryl

      I want to just say how inappropriate it is for Zero Hero to only be concerned with the price of gold going up. It shows a complete lack of regard for what all this means — endless human suffering and social decay. And all that selfish person can think of is his stash of gold. Pathetic!

      • Crusader

        Cheryl, you are indeed a clueless and ignorant twit, aren’t you?

        • Benji K

          Right on Crusader, one of the biggest signs of the recent moral decay is unhappy, pessimistic, ignorant people lashing out at anything and anybody they can. I simply don’t see ANYTHING in Hero’s post that deserves that sort of negative response…….

      • Marc

        Take action to preserve YOUR assets as well. How else will you affect even the suffering and decay in your own family?

      • Bill S

        I own gold too. I see it going up too. I’m not happy about it. It means the economy is getting worse. One of these days gold will be $2500 an ounce and I won’t want to know the economic news that triggers it.

        • http://www.youtube.com/user/zedgehero Zedge Hero

          I feel sorry for Cheryl and not angry, for if she would have watched the episode I made regarding the price of gold and my 9 other shows I have done every friday for the last two months she would have realized that I have covered many topics concerning many oppressed people in the world and how the United Banking Cartel is hurting billions of us at once.

          The gold price is a reflection of so much in the world and it’s refreshing to see four other sane people back me up and put Cheryl in her place. The little gold I have might save my life sometime, that is all i know for sure. But Cheryl, I hope it goes to 10.00 dollars an ounce and the economy does a complete 180 and you can go back to trying to be high and mighty without realizing what you are actually talking about. At least watch some of my other shows before you try and label me as some kind of money hungry soulless gold fein.

          The more people that get into gold, the more they will save their savings and maintain their wealth that the Federal Reserve is stripping away from them. Thank you to Crusader, Benji, Marc and Bill for backing me up, for more of us that know and are prepared, the better we all we be in the end. Good luck to everyone, even you Cheryl.
          http://www.youtube.com/user/zedgehero

  • McKinley Morganfield

    The sooner the fall less damage to be repaired. The later fall the more damage to be repaired. I’ll take sooner over later. Let’s get real. Real estate bubbles and stock market bubbles are little goldfish compared to the killer whale of sovereign debt bubbles that span the globe. It will begin to deflate (default) in Europe and rapidly spread. An unsustainable situation can not be sustained. Its that simple.

    • Steve

      Or the 700 TRILLION of derivative contracts floating around the planet.

  • HerrLT

    The people visiting this site must feel it in the air – the notion that something just “isn’t right”. Most Americans are too far removed from reality to actually comprehend what a credit downgrade would do to their standard of living. The decay in this beautiful country is plain to see, yet most refuse to believe will be the new status quo. God help us and God help the righteous sheep who have no idea what is ahead of them. Prudence would indicate people should be aware of the financial status of their country but it is simply not the case. We have a veil of lies clouding our vision. Years of living on someone else’s dime have blinded the people as to what reality actually is. What it is not is sitcoms, reality television and mainstream news. Sports, movies, etc. are all convenient distractions.

    The world has always been dangerous. The perfect storm, however, that is making its way toward us is nothing short of terrifying. I am glad I found God and cleaned up my life in time to prepare somewhat for what is facing us. It dosent matter how many cans of food, silver or weapons you have. Mentally and spiritually one must be prepared to brace for impact as if your car ran off road into a tree. I hope people who arrive at this conclusion are ready because it’s a tough pill to swallow.

    • Michael

      Very well said HerrLT.

      Michael

    • Steve

      I second this.

    • Nexus789

      I guess YOU made the decision to clean up your life and put things in order. You do not need a belief in a fairy tales and fables to do that – merely some discipline and backbone. A crisis is coming and it is man made and no ‘divine’ intervention – we will reap what we have sown.

      One of the real issues with the US (I worked there last year) is this obsession with religion – it removes people from reality and the issues they need to address.

      • Crusader

        Nexus, are you an atheist?

        • Nexus789

          Religion is a fools errand. I have never had any interest in fairy tales and fables.

          • SandWyrm

            Blind rejection of religion is it’s own foolishness.

            Put God aside for a second and consider that the great religions are actually repositories of 6000+ years of trial and error in how to form and maintain viable societies.

            If we paid more attention to the lessons therein, we wouldn’t be in this current financial crisis. As the earning of interest on loaned money is forbidden in both the Bible and the Koran. Why? Because it failed in the past just as much as it’s failing now.

      • jt

        Since this country was founded on GOD, Guns and GUTS…. America has been the envy of the world, no other nation in History has helped more with world problems than America…. Now you say relegion is the downfall of America…. NO, it is non belivers that have caused this problem. When America was strong, it was strong with God.. Take God away, and you see what you have become….

        • Nexus789

          Actually, I am a non American and even I know that the ‘founding fathers’ were very careful to exclude religion from government and politics least the system became infected by religious belief and therefore discriminatory to other beliefs. Having a secular political and governmental system supports the freedom to believe – anything.

          As for the notion of ‘American Exceptionalism’ only an aggrandized view of yourself could result in such thinking. By the way it is a matter of fact since WW2 the US has been directly or indirectly involved through proxies in almost all conflicts and contributed to the deaths and injury of millions of people.

          America only ‘helps’ when it suits US national interests and this has not been benevolent assistance.

          Take the fairy tales and fables away and we can deal with earthly problems as they are man made and could be solved by man.

          Finally, if a big rock slams into the planet then region will cease as it is man made construct – in reality the earth is a tiny rock circling a small insignificant Sun at the centre of a small Solar System in a vast galaxy, which is one of billions of galaxies spread across an incomprehensibly large Universe – all the things you have ever, experienced, all the loves, all the people you have known, all the silly wars fought over issues, many of which been forgotten through the mists of time, have occurred on this tiny rock….

        • Benji K

          AMEN jt!

      • PaulF

        In my experience the religion of atheism most removes people from reality.

      • Ben Dover

        There are no atheists in fox holes.

      • Bill S

        God is real and Jesus rose from the dead. We’re going to see an unprecedented economic disaster that will lead to a one-world government prophesied by the Bible.

    • Cheryl

      I don’t see how anyone can be mentally and emotionally prepared for what’s up ahead. I imagine many will be dying of heart attacks as they did in the depression era. The only way to really prepare I guess is to accept and come to peace with the inevitability with death.

      Who wants to live in the world they’ve created anyway? You’d have to be insane to have lived most of your life fairly free to have it turn into a nightmare. Many simply don’t have the strength to deal with the complexity of it. The worst part will be when Americans observe the police and U.N. forces are against them and that they have completely lost special status in the world.

      • Ryan

        lol that is your solution? Come to terms with the inevitability of death? As a father, Im fighting tooth and nail to survive to the end.

      • gfmucci

        Cheryl: I agree. Most of us have become a soft and spoiled lot – accustomed to material comfort much more than to hardship. But millions are experiencing hardship. Self-discipline, emotions, and law and order will deteriorate. That is where religion/faith/belief in a higher power/good/God comes in. The “reality” that so many atheists worship can be improved into something much more tolerable and sustainable.

    • Dave in Scenic City

      “Mentally and spiritually one must be prepared to brace for impact as if your car ran off road into a tree. I hope people who arrive at this conclusion are ready because it’s a tough pill to swallow.”

      Concur but, in the end, swallowing the pill is actually easier than the alternatives.

      • Marc

        Bracing in an accident can cause more damage than relaxation. Tension creates breaking points. Best way to survive is to be at home in it…whether you are surviving the woods or the city, living rather than struggling is healthier for the psyche. Enjoy your path. And yes, it all ends in death …definitely something to accept to make the journey more bearable and precious.

    • Rhinehart Fox

      Amen brother. But also note the end of the article, “Yes, it can be a bit sad to think about what is happening, but it is much better to be armed with the truth than to be totally clueless and totally unprepared”. Whether this is the end of time or the demise of this civilization, we should be physically prepared, as well as spiritually and mentally prepped. Those who’ve followed this excellent website have had ample warning to prepare. No excuses!

      • Skittles

        While quite a few of my friends see, there are still many who don’t. I feel that it’s our job to witness what is going on. I want to be aware. We are living in historical times. Its nice to see people here that aren’t pretending things are just fine. Everyone should be as informed as possible. That in itself could save lives if it all goes bad.

    • http://www.zenithminds.com Anthony Allen

      You mentioned a “veil” do you know what apocalypse means? “lifting of the veil” humanity is about to experience something painful & wonderful. I believe this is what 2012 is about.
      Go figure..all this is happening during 2011-2012-2013

  • Mark

    Yes, we have a major problem with borrowed money. I keep hearing about how this debt cannot ever be paid off. I keep hearing how we will have too pay more to roll over the bonds. If we do not raise the debt ceiling the house of cards falls. So what is it going to be. Are we to balance the budget and pay our debts starting now or are we really just going to keep borrowing until we collaspe and never pay it back. A lot of people in the world will be pissed off if we do not pay it back.

  • John B.

    There’s a very simple solution here: spend less than what you take in.

  • 007

    We were already cruising toword a debt cliff. Obama has taken the driver seat and mashed down the accelerator. They have no sense or concern for economic reality or consequences of their drunken spending. It may be almost impossible to overcome our debt problem. However, one sure mistake is to speed up the car to see how fast we can drive off of the cliff.

  • Richard

    Er yes… except that presumably “God” allowed this “perfect storm” to happen in the first place. So what’s the use of pleading with him (or “finding” him) if you already know that he will do what he wants despite whatever entreaties you may have in store for him? I mean, it’s not like he’s going to admit that he made a mistake or something…

    • PaulF

      Apparently Richard doesn’t understand what “free will” means.

    • Bill S

      It’s all part of God’s plan for the years leading up to the Great Tribulation.

  • Nostradamus

    The risk of default of the USA federal government sovereign debt maturing this quarter is 50%.

    Can the Treasury dept avoid this default even if there is not debt ceiling and budget deal? Yes. It can simply divert other expenses into paying the debt due. We all know the consequences of ‘other expenses’ no longer available.

    So what is the actual problem of a default? Two:

    1) With a rating downgrade to ‘default’ grade, between a B and a C, new issues of Treasuries must offer a much higher return in order to be sold.

    2) A default, even a technical 1 day default, will trigger the terms of credit-default swaps. These are sort-of insurance some holders of Treasuries buy to protect against default non-payment. The amount of CDR payment to compensate non-payment of Treasuries bond is equal to the amount defaulted. We are talking $50-$100 billions. If not paid, the parties involved will go under, triggering next round of bank crisis.

    To stop these bad things in the market from happening, the Federal Reserve will likely step in and buy Treasuries out of fiat money. In short, QE3. So in the end, there will be no default. But *somebody* had to pay? Yes, everybody who hold US dollar will see the worth of the currency depreciated, a form of payment. Since the world hold a vast amount of US dollar, the net result is the US government stick it to the world to pay for its fiscal disaster. How much longer will the world tolerate being screwed, again, by Uncle Sam? That my friend, is a $15 trillion dollar question. See, when the world’s holders of US dollar had enough, they will not only won’t buy anymore Treasuries, they will present their T (as in Toilet) papers and demand payment in hard assets. Hard assets? Yes, like National Parks, or the latest model of aircraft carrier. :)

    • Ben Dover

      Are T bonds secured by these assets? I thought they were secured by a promise to pay.

  • David

    I have been following the articles here for quite some time and find them to be consistently excellent, timely, and informative.

    The explanation here in this article, about how a federal crash would domino into state and municipal crashes makes total sense, but, not being a financial pro or expert, just being basically a “man in the street”, I would be very interested in being further educated about how this would play into individual daily life. What, in a typical American’s life, could we expect to see as a result of this scenario, both short term and long term?

    I keep hearing over and over that we need to stock up on non-perishable food and bottled water, and I’m certainly not arguing with that (although my ability to do so is financially limited), but I would like a better understanding of HOW it would come to that.

    Please keep doing what you’re doing in the meantime. I send links to the articles here to my friends and family almost every day, trying to wake up as many people as I can that the American “Titanic” is sinking and that we better get to a boat.

    Thanks,
    David
    Fort Worth, TX

    • Michael

      David:

      Thank you for sending the articles to your family and friends. It is those that are not informed that need to read these things the most.

      Michael

    • Schlomo

      David, I lived in eastern europe in the early 90s so can talk a bit about austerity when a ‘normal’ country goes poor. I never had a problem because I was based in dollars, so while the locals went poor I was dollar rich and was shielded from local currency devaluation; however when the world reserve currency (dollar) collapses, we’re screwed unless holding gold. If the value of the dollar falls due to default it means everything that we import, ie, just about all consumer goods, will go up, a lot, in price. The dollar will be weaker so it will take more of them to buy the same goods from other countries. So think higher prices at the same time jobs are being lost en masse. But wages must fall at the same time, as well as services like hotel rooms if they want to attract business. Competition will be cutthroat among businesses. If local businesses cannot pay their foreign suppliers, there will be a lot less products on the shelves. Also, if there is default contagion, and towns and cities go bankrupt, it means many ‘public servants’ may not be paid and services (city lights, police, bus lines) shut down or get reduced services. Public assets will have to be privatized, ie, roads will have to be sold and the new owners will put in new tolls. Ports, parks and buildings will be sold off to foreigners or ‘special interests’. Regarding water, water may flow through your faucet but there many not be sufficient staff at the water plant (they could be on strike, or not paid, or not have the chemical shipment due to a transportation problem) putting in the chlorine or whatever they do to purify the water, hence all kinds of microbes will make people sick unless the water is boiled. Same deal with staff at electrical or nuclear plants; when electricity stops during blackouts or brownouts the gas stations stop. Think bus, train, subway workers not being paid and hence not going to work. A collapsing dollar will make oil appear very expensive, hence think much higher gas prices, which will be reflected in higher prices for bus rides, airfares, higher produce/vegetable/grains costs which are cultivated using a lot of diesel powered machines… Huge numbers of people get foodstamps and other welfare, if there is no money to pay these people you can expect the inner cities to become like Mad Max (crime) if millions of people miss a single payment, or if they get their payments but food prices are too high to buy much. By saving your wealth in precious metals you will likely retain or expand your wealth, though there are no guarantees and gold may fall too (the price may fall but its value may stay constant) if there is a widespread deflation (lack of money in the system). That said, I think they will increase the debt ceiling and wont default… yet. Much of what I have just wrote is happening in slow motion now. Some top minds strongly suggest moving out of the US because, while other countries may be poor, they don’t have the dog eat dog lunacy and explosive potential of USA (ie, see lack of looting after Japan earthquake).

      • HerrLT

        Schlomo – I would like to hear more of your experience regarding living through what we are seeing now. I am on a path to move to a ‘poorer’ country within the next two years, God willing. 45,000,000 Americans on food stamps and many millions of others with a “Im getting mine” attitude. It is sick society that is an ammo box in a burning room ready to pop. :(

  • Michael

    I thought that interest rates were kept low because the Fed was creating money to buy most US debt. I think if the US didn’t have a printing press then the interest rates would be as high as Greece. The last data I read says that our budget deficit is increasing by about 200 billion a month.

    http://www.cnsnews.com/news/article/february-federal-budget-deficit-sets-rec

  • Cyk

    There’s only one solution:

    Let those people pay that can afford it.
    Tax the rich, not the middle class and not
    the poor.

    Rich people now have to decide in what world the want to live in the future:

    a) Give up most of your money (that most of you don’t really need), pay your employees well, and live in a world where you can go through the streets without bodyguards, be respected for your success, send your children to public schools, let your children make friends in all population stratum, travel to where you want, live in peace and security,

    OR

    b) Continue stealing money from the poor and become even richer, live in gated communities and guarded country houses far from civilization, need private jets and bodyguards whenever you travel, have to send your children to prison like elite boarding schools,
    live in constant fear of being robbed or abducted, or betrayed by your lovers.

    Choose now, and choose wise.

    • John B.

      You could tax the rich @ 100% and there still wouldn’t be enough revenue to balance the budget. What you have to do is tax the middle class. The middle class is being taxed to pay for all the welfare deadbeats and cronies (e.g. GE) who vote for Democrats. The only problem is that the Democrats don’t have enough revenue for all their money giveaway programs, so they have to borrow it.

      That’s why the middle class created the Tea Party. No more money giveaway programs. No more borrowing to pay for it. It’s time to starve the beast.

      • THATxDAMNxGUY

        There is no middle class anymore….. you either have more money than you need, or you don’t have enough.

        And there are a lot more without than with!

      • Benji K

        You hit it right on the head John. After being in the “upper” middle class most of my life, I suddenly find myself in the “middle” lower class in the last couple years. Even at that, I know taxing the “rich” will do nothing for our current situation. It will only cause them to tighten their purse strings even further, leading to higher unemployment and higher prices on consumer goods. Like I said, I am NOT even remotely close to being considered financially “comfortable” anymore. But I do understand that the middle class relies on the so-called “rich” for the majority of jobs and opportunity. It doesn’t matter how “evil” people may view the upper-class, that’s just the way it is.

    • justawhoaman

      Thanks for the article. Very informative and timely.

      Now then, what planet do you live on, Cyk? In the first place, who ARE the rich? Those that make $100k or more; $250K or more?; 1M or more? If you “take” from the “rich” what is their incentive to HAVE employees? Frankly, I gave up my business because I could no longer afford all the taxes for my employees. I’d rather live hand to mouth for myself than work my ash off for people who feel entitled? Sounds like you fall into that category. I have friends who do fall into the “rich” category (250k+) and their taxes are already over 40%. That’s working through May 22nd before you start working for yourself. Why would anyone bother to work at all? That’s precisely why Socialism doesn’t work. Never has. Anywhere.

      The rich don’t “steal from the poor”. Good golly. Even as late as the the early 1900’s, poor and disabled were taken care of by the church… supported by the rich! Wilson and Roosevelt fixed all that by forcing people to pay, taking the responsibility away from churches and synagogues. Those administrations were the start of all this entitlement and debt demands. Since the socialists are hardly going to own up to their lies, most of us have been too busy going to school, then working, to know the truth. Now it’s here to bite us.

      Bush and his NWO decisions to drive up the debt didn’t help, but Zero totally owns the extent of this debt situation. As someone else said, he’s had his foot on the accelerator taking us directly and swiftly to this cliff. He absolutely will not hear the Tea Party Patriots who demand that the spending is stopped. The man surrounds himself with Communists so it is absolutely his intention to take us down from within. He IS the beast and refuses to be starved!

      Better steel yourself for the financial disaster now before it is truly unfixable later. Chaos now, every man for himself later.

    • Bill S

      The top 1% of wage earners already pay 39% of all personal income taxes. If you tax them more you’ll slow down the economy even more.

  • iamawake

    Maybe it is time we take our medicine. If not now, when. Our current path is unsustainable, we have to do something and now is as good a time as any.

  • Okie Dan

    The higher cost of our national debt will result no matter whether or not the credit agencies downgrade the Federal government’s financial institutions or not. Foreign governments are buying less of our treasury notes. The Federal Reserve buys them with digital dollars out of thin air. We either have higher credit costs, food costs, gasoline costs, or some sort of costs. Presently it is hidden and the politicians can say smugly it is the evil oil men causing higher prices, when it is the burden of the natinal debt being printed over by the FED. We are left with an inflation tax as we monetize debt, Zimbabwe style. But look on the bright side, because of what Zimbabwe went through, the Zimbabwe government is seriously considering backing their currency with gold. They no longer trust having a currency backed with printing presses. Civilization to a degree larger than realized rises or self-destructs on the basis of sound money, because money is the medium of exchange. When the medium of exchange collapses, chaos erupts. When the medium of exchange is sound, people go peacefully about their business feeling that their labors are meaningful and contribute to their pursuit of happiness.

  • Ben Dover

    These same agencys rated all of the subprime junk AAA. By the time they rate USA lower, it will have already been obvious to everybody else.

    These agencys will not downgrade USA as long as the gubmint has annointed them as the only credit rating agencies.

    • PaulF

      So I would have said 6 months ago, but now here they are making accurate calls on the eurozone.

  • r.bitting

    That thing you are feeling in the air is something much bigger than just the financial and moral collapse of America, it’s a worldwide collapse. God is about to act in a big way. As America collapses, many who trusted in a prosperity gospel will walk away from the faith when the party ends, while others who could care less about God or the things of God, when they have lost it all, will cry out to Christ and be saved. Those of us who know the truth and have been blessed by God to recognize the time we live in should act accordingly by reaching out to all with both financial and spiritual aid. We are here for such a time as this. The sense of urgency you feel is’nt about bullets, beans, and bandaids, it’s about loving God with all your heart and loving your neighbor as yourself.

    • Skittles

      Exactly! We are here at this time to see!

  • sycophants and quislings

    Anybody who has been paying attention since Reagan was elected should know that things are way way worse than “not right”.

    Things have been a disaster in the making since Reagan said he would lower the National Debt.

    This site does a good job of reporting the end but the end has been here for over 30 years.

    • John B.

      Yes, I yearn for the Jimmy Carter years of “malaise”, and “stagflation”. Oh wait, there here already!

  • r.bitting

    P.S Forgive me Lord for mistakingly typing Gog instead of your righteous name “God” in my response…. I must have been looking ahead.

  • ScoutMotto

    “A lot of people argue that if the federal government ran a balanced budget from now on none of this would matter.”

    I bet these are the same people who used to say “We just owe the debt to ourselves.”

    It is impossible to balance the budget under the current banking system. The total amount of debt always exceeds the amount of money in existence. Money has to be continuously borrowed to pay interest on the previous borrowed money. It’s designed to fail.

  • Tent city

    I know how exciting it must feel, to sense that the end of our worldly econmic system might finally be coming to an end. We are all anticipating something big, something huge, something so life changing to occur that we tend to forget who is in charge of this worldly dimension. The elite who are possessed by the money god will never let a collapse occur, these are the same guys who run the rating companies, it’s like hollywood rating its own movies,
    The elite will raise the debt cieling,
    The usa will get to keep its triple a rating
    The elite who control our media will beat the drums of how our economy is booming now that the debt cieling is raised.
    Youll see how they will successfully manipulate the masses into thinking how great everything is now that as a nation we can still borrow.
    I cant see them just simply letting it fall apart
    The elite have alot more to lose then bloggers comenting on a web site.

    • McKinley Morganfield

      I agree there will be no default come August. Yet, they will merely be buying time, time to get through the next election cycle. And time to drive as many people as possible into deeper and deeper debt. They are busy as bees putting as many people into bankruptcy as possible (even whole nations) in order to plunder their hard assets. Greece and Ireland are being cannibalized as we type. Portugal, Spain, and Italy (Italy has huge gold reserves) will soon follow. We’re the biggest carcass they want to plunder so it just takes longer to bring us down.

      Simultaneously, they want as may people as possible dependent upon the system for the food they eat and the roof over their heads and voting accordingly to keep the handouts coming. Its Gary2’s dream world utopia, although he doesn’t understand what his dream will look like when the dream ends and reality begins.

    • Gardenman

      They do rate their own movies! That’s what the Oscar is…

  • Cheryl

    I want to just say how inappropriate it is for Zero Hedge to only be concerned with the price of gold going up. It shows a complete lack of regard for what all this means — endless human suffering and social decay. And all that selfish person can think of is his stash of gold. Pathetic!

  • Mark

    All I know is I’m involved in the Real Estate industry and banks are dumping properties right now for anything they can get for them. I’m seeing properties regularly going for 10 cents on the dollar. Word is they are expecting values to deteriorate further.

    Several “Hangers On” who have been trying to sell their homes for 1 to 2 years are now seeking short-sales or talking foreclosure. These are people who have been struggling to keep their heads above but are giving up.

  • St66

    Just crazy to see what is happening here. The triple A rating being lost will just be another hit.
    Goggle/Yahoo Search: DailyJobCuts

  • knightowl77

    As usual, a great article….though as McKinley states, sooner rather than later…

    If you agree with Ron Paul that we are insolvent or bankrupt, why would you want to borrow more? I realize that it kicks the can down the road for a bit longer, but we have a deeper hole to climb out of in the end…Those who are aware have been preparing. Those who are not aware by now, probably never will be. Their first clue will be when the next episode of American Idol does not air as planned.

    I realize that it will be bad, very bad. But if the end is inevitable, lets face it now before it gets any worse.

    • Michael

      Actually I am for abandoning our current debt-based monetary system completely.

      Michael

      • knightowl77

        We are speaking John Galt like correct? It has to collapse before we can fix it?

        I think that is what must happen, however since I have not seen that in my lifetime…how do you envision that will unfold?

      • PaulF

        Unfortunately the people of this planet would have to defeat the entire military-industrial complex (meaning the military might of the United States) to unseat the banksters, which is what it would take to make this happen.

        • SandWyrm

          Just 20,000 “Insurgents” in Afghanistan are doing just that right now.

          Do you think that the American Midwest, Pacific Northwest, or New England would be any easier to pacify? Instead of roadside bombs and suicide bombers, you would see thousands of cheap, home-made UAVs spying on and bombing the invaders in a 21rst century version of the American Revolution.

  • Dr. Chicago

    Herr LT – I agree with you completely, however God ordered Jacob to prepare for the seven year famine. It is coming again and while faith in God will provide, it does not hurt to listen to his warning echoing the hills and fields.

  • http://infowars.com Capt. Woodrow F. Call

    Amen HerrLT. I’ve had 3 people who have asked where was it I buy my silver. I had tried to wake them up years ago. People are feeling a disturbance in the force. The more people that wake up & take action, will bring on the crash that much faster. Let us pray the lunitics do not start WWIII to try & cover their asses.

    • 007

      WWIII will be Obama’s full employment program. You will either be dead or fighting China. One way to get unemployment down.

  • bobbobbobbob

    u rely on mmoodys like they got it right before THEY DID NOT the interest on the debt will be paid no matter what u say and the dollar will most likely rally on a default. because it is deflationary. my advise to u who controll this very informative blog is simple put most of your funds in a good chinese stock fund and in 20yrs u will rule REMEMBER CHINA RULES

  • Alasha

    I am surprised we have gotten away with this for so long, already!

  • http://www.placeofrefuge2012.com Sheila

    The only part of this article is the “COULD” in the title. The US government is going to crash and our credit rating means nothing.

    Can’t wait

    http://www.placeofrefuge2012.com

  • onecansay

    Feel like that NUMBER yet?

    Get to work, you slaves.

    Also, read this.

    http://www.thetruthcentral.com/illuminati-created-the-us-to-advance-nwo/

  • bert

    hate to tell you all this, but us debt is not rated correctly by moody’s nor any other mainstream rating agency! us debt is correctly rated by the weiss group and it ain’t rated anywhere near aaa. the time to panic has gone by. financial hell is hear NOW!

  • Gary2

    Please allow me to set all the ayn rand doltish devotees straight. Here is why we need to tax the rich:

    A good idea in an impoverished third world nation won’t make someone rich, but it will here in the US because previous generations have paid taxes and built up this nation’s infrastructure. Yet Libertarians and the far Right seem to believe no one should feel there is much of a debt to society for that opportunity even if it’s the rich who arguably most exploit those public resources.

    Now lets put to rest anyone who says we do not need to tax the rich hard.

    There is absolutely no such thing as a self made man or woman. zero nada zip!

    Even though over 80% of Americans agree with me that we need to tax the rich hard, the other 20% know I am right, they just can’t admit it or their false world view will come crashing down.

    • Tim

      When the house of cards implodes, I think you’ll be concerned about other things, like keeping your family from starving. Or, since you live in Wisconsin, from freezing to death in the winter. It would take a miracle to turn this thing around. And I don’t think it’s going to happen. So forget your Robin Hood fantasies, and steel yourself for what’s coming because it’s not going to be pleasant.

      • Brandy

        You said that right!!

    • Crusader

      Gary2, let me set you straight. Your radical left wing and Marxist socialist rants fall on very deaf ears to most readers of this site and to most Americans in general. You are far, far out of the mainstream of American political thought and tradition and people like myself will not hesitate for one second to call you out on it. The great socialist experiment has failed and you and your type–like the current Marxist-in-Chief–will soon be swept aside and dumped into the trash can of history.

      A newly revived American nation based on our founding Constitutional beliefs and principles will emerge and rise again. I for one will devote the rest of my life to this cause and help ensure that your failed and evil philosophy of government and governance NEVER comes to fruition in this great nation we call the United States of America.

      • Green Mountain

        Crusader,

        Couldn’t have said it better myself. Socialism is a foolish and psychologically weak system that is compatible only with hive insects and the static, old, and musty hegemonies we call Europe.

        It’s not for brave, dynamic, risk-seeking, culturally diverse, and inventive countries that seek to lead the way in global affairs.

      • Gary2

        You did not respond to anything in my post. Typical right wing tea bagger.

      • Gary2

        Crusader-I am still laughing at your low information doltish post. Thanks I needed a good laugh tonight!

        As for Obama being a Marxist if you look at facts he is actually way too conservative which is why many on the left consider him a big disappointment.

        You throw Marxist around and do not even have a clue as to what it is. Your probably a ditto head rush drone.

        • SandWyrm

          Obama is a puppet. Don’t make the mistake of thinking he does anything he’s not told to do. As for his policies, they’re simply re-hashed New Deal Socialism of the sort that FDR used to push.

          Problem is, socialism doesn’t work when there’s no money left to borrow. Because you can’t maintain a functional economy when only a small percentage of your population does any productive work.

      • Mr. M

        You will be too busy fighting for a piece of bread and a shelter when USA collapses with his socio-economical principals (capitalism).
        The great socialist experiment – as you call it – has not failed (if you’re intending the collapse of the USSR). It was “defeated” with the great fiat money ponzi scheme strategy of printing endless money to sabotage, divert, corrupt and finally demonstrate to the same soviets that capitalism was the winner.
        Lies have short legs, they don’t go too far.
        Face it: capitalism is dead and USA is not feeling very well.
        Mr. M

    • knightowl77

      The rich simply do not have enough money to make a dent in the deficit…..You could take all of Warren Buffets, and Bill Gates money and that might cover a month….Also 80% of the American people do NOT want higher taxes…the majority of Americans want less spending…either way, we still collapse

      • Gary2

        then lets take the rich people money and make a dent. Saying it will not solve the problem does nothing but make excesses for inaction.

        • SandWyrm

          You show an ignorance of history. Particularly that of Soviet Russia during it’s early years when famines swept the country.

          They did everything that you’re advocating, and more. But the only result was death and misery.

      • Gary2

        Also 80% of the American people do NOT want higher taxes…the majority of Americans want less spending…either way, we still collapse

        Wrong-80% want higher taxes on the rich, not higher taxes for everyone.

        You can simply Google to see that I am correct. Sorry to let facts get in the way.

    • 007

      Yep the rich are to blame for all your troubles. If it makes you feel better just keep saying it. It has absolutely nothing, however, to do with the crisis we are facing.

    • END the FED

      Didn’t you mean to say 80% of those that do not pay any income taxes at all and/or collect a welfare check

    • Ben Dover

      Gary is soooo wise! We would all be sooooo much better off if we just had the sense to listen to him. He is always the smartest person in the room. If you don’t believe me, just ask him.

  • dw

    Kick the can down the road?

    I’d say we are kicking it into a cul-de-sac.

    @ David (7:11 am)
    Imagine downtown Detroit three days after the food stamps didn’t come in the mail.

    Imagine the same thing in LA, NYC, and DC.

    If I relied on any large city’s infrastructure to live, I’d start changing that. Good luck. I’m not screaming that it will happen tomorrow, or next week. But the math is hard to deny.

    I don’t see how to get 40% of the US population off of the gov’t teat without looting and burning in the cities.

  • William

    The federal “gubmint”, changed into a criminal organization by the Shrub Bush, is borrowing money to pay the interest on money already borrowed!….with more borrowing to support the wildly out of control military industrial crooks. Nobel prize winning economist Stiglitz places the final cost of the unnecessary wars created by the Shrubber at $3-4 TRILLION, including the replacement or refurbishment of equipment, the transport of salvageable equipment back to CONUS, and the disability payments to wounded and mentally unfit veterans, which these veterans certainly deserve. This is the genesis of the destruction of America.

  • NO stocks 4 me

    yeah yeah yeah, and I bet everyone here (cept me) has a cell phone, Iphone, Ipad, HBO, and high speed ISP.

    Do without these and I may belive you have it so hard.

    • Brandy

      ur right I have a mobile phone and internet service, I only have basic cable. I live with 5 adults all working jobs only 2 are full time the rest of us are part time… we are 2 families soon to be 3 families living together because its the only way we can survive right now. We all share the bills thats how we can still afford to have phones and internet and cable. It sucks no privacy but atleast we can make it.

  • Steven

    From how it looks to me. Only a select few of the total population is meant to know the things that are coming our way.

    My father and I try to tell my mother about it and she literally shuts off like a light switch, she doesn’t say anything for the whole time we’re explaining it. And then when we’re done, a few minutes pass and then its some stupid bs topic change and its never brought up again. My probable soon to be ex girl friend is the same way.

    SHTF air heads.

    They don’t care or they are so brain washed and lulled by the tv and their immediate problems and can’t be bothered.

    But those of us that do know. We actually Know. We don’t suspect. I heard only 7% of the US population is prepared for whats coming. The other 93% is going to be coming after Us.

    I am positive that with in the next 10 years, each of us will have to kill at least 1 person in defense of ourselves, property or loved one.

    • Ben Dover

      10? You Pollyanna!

  • StandUp

    Fear mongering.

  • Covington

    Don’t worry. The debt ceiling will be raised. The political grandstanding is all show for election purposes. They will come to some agreement so they can kick the can down the road a little while longer until after 2012.
    Barack Obama is pathetic. If he was so serious about this why didn’t he come on the seen to presure law makers in January. Plus he’s been adding to the problem of the deficit with his socialist measures.

    And then there is the question of the ratings agencies. I mean come on. They should have been making their warnings years ago. The fact that they are have only just now begun to do so means that there is some alternative motive which would be to serve the bankers.
    The bottom line is that the bankers know the US govt is broke which is why they are presuring lawmakers via Moodys and S&P. Its all a joke and worse its fear mongering at its highest.

  • Covington

    Hey Cheryl,

    By the way its not selfish in anyway to be concerned about the price of gold. It would be moronic to not be so. Same goes for silver.
    You think the folks in Weimar Germany were being selfish when they took refuge in gold and silver???? All the rest literally had to use their fiat money to keep warm.
    So zero hedge is rather wise I think.

  • mondobeyondo

    We won’t have an AAA rating for long. It’s amazing we’ve managed to have such a high rating for so long. If the U.S. were any other country, our bonds and treasuries would be downgraded to junk status. But our saving grace is that we have the world’s reserve currency (the good old greenback).

    Okay, about the gold standard… *sigh* Well, here goes:

    The dollar should have never left the gold standard. If it had not, it would have been a stable, sound currency backed by something of value. It would have definitely limited the amount of government spending. Without a shadow of a doubt. (You can’t print gold, and there’s only a certain amount of gold in the world. A guarantee to redeem dollars for gold, by countries or private citizens, would make the government think twice about spending money for unwinnable wars and pork projects.) No gold in the treasury? No excess spending!

    I have an old $10 bill from 1950 – it’s a federal reserve note – and in the upper left corner it says “This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States Treasury, or at any federal reserve bank.” Lawful money is gold and silver. Back then, that $10 bill could be redeemed for the equal value in silver coins.

    Nowadays? Your bills simply say “This note is legal tender for all debts, public and private”. You can’t redeem it for anything except maybe $1 or $5 Federal Reserve notes, or maybe some quarters or dimes. If I took it to the local Chase or Wells Fargo or Bank of America branch, they will not give me silver coins in exchange.

    How did the dollar get off of the gold standard? Back in the late 1960’s, France asked the U.S. to have some of its dollars redeemed back into gold. The U.S. quickly found how expensive fighting the war in Vietnam and social programs like Medicare, Medicaid and the “war on poverty” can be. What if other countries had asked for their dollars to be redeemed in gold as well? Had we stayed on the gold standard, our nation would have been broke long ago. So Nixon shut the “gold window” in 1971, and the dollar has been a fiat currency ever since. Your dollars have been losing value since 1971, and even faster since 2000, because they are based on nothing of value!!

    Now that the dollar is a fiat currency, it basically gives the Fed a license to print, print, print. Our currency isn’t backed by gold. It isn’t backed by anything! A billion here, a trillion there. And now, the country is broke and threatening to default – even under a fiat currency system!! Sure, we could just put the printing presses into hyperdrive and print $14.5 trillion overnight. (You can’t do that with gold. Wink, wink) Problem solved, right? Well yeah, except that the dollars in your wallet would be as valuable as toilet paper. You may as well use a roll of Charmin to buy a dozen eggs.

    The best thing to do is just hit “system reset” and start again from scratch. Unfortunately, there would be a tremendous amount of pain and misery for the majority of us.

    • Mr. M

      mondobeyondo,
      you well explained the matter except for one very serious particular, that is the real scope of Nixon’s move.
      My personal opinion is that behind this move there was Zbigniew Brzezinskj, and that it was made as a tactical measure to win the cold war against the USSR. The strategy actually worked and it brought after just 20 years to the collapse of the Soviet Union. A simplistic metaphor of a poker game: you can’t win a game against someone who keeps on putting more stash of money on the table.
      Chinese marxists reacted differently, Den Xiao Ping understood the trick and started playing accordingly by the capitalists rules.
      The fact is Marx was right, capitalism has killed itself, it’s a system that cannot survive on the long run.
      Unfortunately, most americans have become too complacent on their fiat money system for it has worked for just about 40 years. When the collapse of USA will come it will become very clear that only socialism can give a future to humanity.
      Mr. M

  • MNmom

    Micheal,

    As good as this post is, I think Obama can, and will, raise the debt ceiling himself, through the use of the 14th amendment to the Constitution. I think the risk of a default is
    highly unlikely, simply due to this.
    It WOULD be a disaster if the debt ceiling is not raised, but it would also be a disaster to let things ride as they always have.

    • Brandy

      correct!!!

  • Gary2

    Michael-My recent experience with my power being shut off showed me the importance of prepping. I always thought preppers were a bit extreme (not crazy, just extreme).

    I was wrong and they are correct.

    • Michael

      All I can say is wow.

      :)

      Michael

  • bert

    obamarama vs. perry. the ptb can’t lose with these two, but we the people will. are you ready amerika?

  • 007

    Amazing, a rating is so important when it comes from the same folks who gave you the AAA sub prime mortgage securities.

  • Mario

    You still have time to prepare, the real mess will not start till Dec. 2013. After that it’s down hill till the world is under the control of the group who is behind all this.

  • John S

    The U.S. will retain its AAA rating. Otherwise, the CEOs of Standard & Poor’s and Moody’s would be shocked to learn firsthand that the facilities at Guatanano Bay serve a domestic Chardonnay and would be quick to reconsider any downgrade.

  • Weknowthegame

    Dear Michael,
    Reading all of your readers highly educated, highly informed and highly intelligent comments, I must admit i am proud to be part of This Web site that has such a great writer as its web master, “Michael” and all of his readers.
    I have come to the conclusion that we are for the most part in Understanding/agreement that the Powers to be will raise the Debt ceiling.
    A savior to some. (the elites, worldly powers etc.)
    A HUGH disappointment to others, people like us.
    But for the most part we all know this is political grandstanding.
    The really, really, sad part about all this is,
    That most Americans know it is a farce, most of the world knows it is a farce.
    And ALL of Michaels readers know its a farce.
    And to add insult to injury the Media GOONS, CNBC, FOX, MSN, all of them, act as though we haven’t a clue.

  • Jack

    “The rich simply do not have enough money to make a dent in the deficit…..You could take all of Warren Buffets,and Bill Gates money and that might cover a month…….” – knightowl77

    True,except that Warren Buffet and Bill Gates are only rich by comparison.
    Rothschild,Rockefeller,Windsor and Warburg,they(Buffet & Gates)would barely qualify as lower middle class.

    Who is rich,can only be objectively seen,when one looks at the money pyramid from the top down.
    For the 99.99% of the world standing at the bottom of this pyramid,the top is simply too far away to be seen with the naked eye.

    Buffet and Gates are visible only because they stand far closer to the bottom,than most people dare realize.
    And that is right where the rich,the truly rich want them,blocking our view.

  • Jack

    Correction:

    Compared with names such asRothschild,Rockefeller,Windsor and Warburg,they(Buffet & Gates)would barely qualify as lower middle class.

    Is how it should have read.

  • patriot alice

    Too big to bail, and too big to fail is the new norm, it’s hard to believe that even though Europe is leading the way to hell because of their high debt, here in the USA we continue to print, borrow and spend our way to hell too. When will they stop? To continue borrowing 2 trillion dollars a year to prop up a false economy is crazy. Huge cuts in government spending and tax cuts for the private sector to create jobs is the only solution, but politics won’t allow it to happen…..

  • Anne

    tax the rich is not the answer. the Govt spends more than they take in and they don’t care about us. Most people don’t seem to realize that the majority of taxes used to be paid by corporations. I believe it was in the 60’s that the % flip flopped and now individuals contribute the most. Really, all we have to do is tax the imports and we would have enough as long as we don’t keep trying to police the entire freaking world. But, the people in control have no intention of stopping spending, stopping wars or doing the right thing. We are truly in the situation of biblical porportions.

  • Unicorn

    7/70 rule= 1 trillion at 7% doubles every 10yrs

    1 trillion becomes 2 trillion in 10yrs
    2 trillion becomes 4 trillion in 20yrs
    4 trillion becomes 8 trillion in 30yrs

    So you brorrow 8 trillion at 2.33% to pay
    off 1Tril. principle & 7Tril. interest in
    30yrs the 8Tril. becomess 16Tril.

    Borrow 16Tril. at 1.16% in 30yrs =24Tril
    Borrow 24Tril. at .58% in 30yrs =32Tril

    So basiclly your still making 7% on the
    original 1Trillion.

    My math maybe fuzzy but we are broke.

  • Bill S

    It won’t be long and the US government will stop borrowing altogether. It will print trillions and trillions of bogus dollars. The result will be hyperinflation, bankruptcies at all levels of government, and a complete collapse of the economy.

  • http://wwwcfvs.com stophypocrisy

    All the government has to do is say that the Federal Reserve is counterfeiting currency and have them all arrested and tried. At the same time, start issuing US Notes and abolish Federal Reserve notes, just a president Lincoln did and JFK was doing when he was murdered by them with executive order 11110. The US could borrow money with no interest and get the house in order. Now you should know who is in control.

  • ByeByeUSA

    China already stripped US of AAA rating a long time ago with its own rating agency. Moody’s scale is too bias on western countries.

  • jd

    Wow.

  • http://jnds Fred

    WOW, it is just amazing to me how many people on this comment page just say the most narcissistic, ignorant, narrow-minded crap to each other. Come on guys, it’s just someones opinion, which they are entitled to no matter how wrong or distorted it may be.

  • http://jnds Fred

    (look at the previous comment page)

  • http://jnds Fred

    Oh, and unicorn, your right, but it really doesn’t matter how you get there, as you said, “we are broke”

  • d dean

    = broken link
    . gd site
    . cant link to ‘comments’

  • mondobeyondo

    I feel the debt ceiling will be raised, in the nick of time, just after all the drama on Capitol Hill has played out.

    I hope I’m wrong. I’ve been wrong before, lots of times. So take heart in just knowing that much (ha!)

    At this point, I might as well use my lackluster theater and drama skills I learned in community college years ago. Maybe they’ll be good for something, who knows?!

    If the grand ship of state does impact the huge debt iceberg… life won’t be over. Life as we know it now – our carefree, ice cream eating, American Idol watching life – will end forever. But life goes on. Just a different paradigm, that’s all. A paradigm none of us are used to.

    Just prepare yourselves, and stay close to a lifeboat. Gold, silver, food, guns, ammo. You will need those. Harry Potter and Twilight memorabilia – no, that will be useless. That will not feed you, or protect you, or make you healthy. But if that is what the sheeple desire at the moment – if it makes them happy to be hugged and kissed by a handsome vampire or wizard… so be it.

    The water is cold, and there are many sharks circling. They are the Fed, and the big international banks. For the average American middle class worker, it is impending doom. But they don’t see it, not yet. We are being told that sharks are our friends. The global ecosystem needs sharks at the top of the food chain, to combat the global warming that the Fukushima nuclear plant is bringing us. Hey, what’s Charlie Sheen been up to these days?

    The elite, Federal Reserve and big banks would all love to have you over for dinner. It will be one heck of a party! Your bank/credit card company just sent you an RVSP. Your overcharged credit card balance is your ticket to enter. It’s their “2011 Recovery Bash”! Won’t you attend? Drinks are on the house.

    However, YOU, and your fellow (former) middle class citizens, will be the entree, main course and appetizer for the elite. You are being set up. And soon, if you fall for the trap, they will finish you off.

    • mondobeyondo

      RSVP. That’s supposed to be RSVP, not RVSP.

      Respondez s’il vous plat. RSVP.

      Yikes!

      • mondobeyondo

        I know, I know. It’s “plait”, not “plat”.
        It’s “s’il vous PLAIT” (“please” in French).

        Just so you know, I got a “D” in French in one semester in college.

        I plead guilty. Get your rotten tomatoes and eggs ready.
        Ready… aim….

  • Abia The Cat

    Wonder if anyone can give a guess as to when the US economy will actually fall? With the way the US is printing money and shipping it overseas, we appear to be in better shape than we look.

  • Mr. G

    It just shows us what a big phoney production we are forced to live in. Obviously, the credit rating should have been dropped long ago. This is mere public theatre. The people who run things will do what they want, as usual. Anyone who believes there is any basis in fact for credit ratings must be a fool. The only basis for these things is playing the public. The best bet is to watch it with humor and cheer against the powerful and corrupt.

    Enjoy your own life and you will already have them beat. That’s the real reason they want to control you – they can’t stand it if you have a good time, you wretched nothing!

    Control Control Control – it’s what they crave. Feel bad and you give it to them. Feel good and maintain your dignity, and you beat them no matter what. You need very little to beat them, you see… It’s hard to believe, and yet true.

    Mr. G

  • Mr. G

    PS – It’s all about fear – no joking. Fear of not fitting in with your middle class pals, in particular. Beat all the fears and you beat the powerful, with all their money and influence. It is that simple.
    Mr. G

  • ross

    Wont happen

    The ratings agency will NEVER downgrade, they are largely based in the US & most of the board of directors are US citizens.

    Because of this the US government are able to manipulate them easily.

    I would be shocked if they werent covertly paying them off or applying some sort of pressure to these individuals.

    I would expect all sorts of gov agencies from the CIA etc… to have “their guys” in there feeding back info & influencing things.

  • Dr. Nancy

    Financial hell is what we should all be preparing for. I’m encouraging everyone to start saving food. Until recently I was focused on paying off all debt, but then I found some information put together by a millionaire that said some things I’d never heard before, that there is a more profitable way to proceed than paying off all debt. This can help you too to prepare–

    “How to Profit like the Ultra-Rich in Times of Economic Chaos”

    Complimentary Video here-

    http://theelevationgroup.net/presentation/register.php?a_aid=160667&a_bid=290b868b&chan=y

  • http://www.youtube.com/watch?v=_u81qXOYfKg Ben Dover (America)

    And stock up on clean drinking water, store-able food, vital medicine(s), vitamins, aspirin, durable clothing, hygiene products, toiletries, necessary tools…

  • http://www.thewickednoodle.com the wicked noodle

    Charlie Sheen is such a tragedy!

  • Banjo Ben

    We are in for a meltdown people, I have been preparing for over 2 years now, and am now seeing the signs that I hoped i would never see. I have a strange feeling it will not be long now and am terrified, because i need about another 5000 dollars in food storage, medical supplies, water security, seeds, and ammo before i know we will be well prepared to weather the storm for as long as necessary. anyone have any creative ideas? i am young, with a wife and two children, so we have been paycheck to paycheck and saving up a sufficient stockpile has been slow, hard, and taken real dedication. i have a large run of chickens, been raising pigs, turkeys, rabbits, and goats and have a 11,000 sq ft garden in the ground. we have been blessed to have bought a property out in the country in rural indiana with 14.14 acres and a nice home that we have converted to all wood heat, and a mostly-selfsufficient farm. i just feel strongly that we only have a few more months before this spirals quickly.

    • Davey Downer

      Some group of thugs will come along and just take everything you have saved up. Rape your wife and kill you all…and I’m sorry to say, there won’t be a thing you can do about it.

  • David

    The U.S. has to get to some of those credit raters and pay them off for us to keep our AAA status. What the hell, our political parties get paid off by special interests all the time! Everyone has a price and Im sure our government can find a way to corrupt them into giving the U.S. a good rating so that we can stay afloat for a little while longer.

  • Ronnie Bell

    Just cancel all debt.Keep your house car etc and start again. The greedy super rich can keep their house and learn to cook and maintain the pool.

    Islam wants to destroy America, have a go. America just takes their oil goes on the gold standard and no zillion dollar wages for banksters and CEO’s. Bring back the family unit and no more fruit and nuts.

  • REED RICHARDS

    I disagree. If Goldman Sachs is too big to fail, then so is the U.S. Government. There will be no cataclysmic meltdown as everyone seems to predict. Uncle Sam will pay his bills because he has no choice but to pay his bills. So put this idea to rest about a default because it will not happen……………

  • 007

    I know it will be tough to lose our credit rating, but I will be somewhat glad when the markets and ratings acknowledge the reality of our debt. If interest rates rise because no one will loan money too us that will at least show the country the problem. Likewise, when the federal reserve prints the money to buy the government debt and it causes serious rampant inflation, they will have to stop it.

    But as long as we can charge on the credit card with litte apparent consequences, the public will just keep going along with it. The system is falling apart, but it is moving so slowly the public hardly notices. A big dose of reality may be the best thing for the country.

    Although, I doubt these credit rating agencies will do anything. They are so corrupt and vested in the current system, They won’t have the nerve or morals to rate our debt fairly.

    With accrued debt we are at 600% of GDP and we have a AAA debt rating. What a joke.

  • Davey Downer

    If the US economy collapses no matter how much gold or silver and food you save. Some group of thugs will come along and just take everything you have saved up. I’m sorry to say, there won’t be a thing you can do about it.

    Your best bet will be to be join one of those groups of thugs, carry a gun and take from those who have what you need.

  • Jackro

    And now we have a downgrade to AA+, lets see how close this prediction is.

  • Dogrefuge

    The world has been goin’ to crap for decades…ever since America voted Ronald Reagan for President…They blamed Carter for Iran takin’ our people hostage and they let them go just in time for Ronald Reagan to be sworn into office, and now the Republicans want to bring the credit ratings down in America, just so they can blame O’bama…Republicans couldn’t get any dirtier but then they turn around and do other things. I can’t wait ’til America wakes up and notices what the two party system has caused.

  • US Citizen

    I wish the economy would go ahead and just completely crash. At least then we can rebuild, and start a new with a level playing field.

    We need a revolution our government has been trampling the constitution for years. The FCC needs reform to allow for real freedom of press and speech. The NFA needs to be repealed, and a better solution found. The FDA also needs reform, there is no reason other than greed for us to not be able to import affordable prescriptions. Antibiotics should be available over the counter.

    We also need better trade policy. How can American businesses be expected to create new jobs, if they cannot compete with there foreign counterparts.

    The banks, and the auto industry SHOULD NOT have been bailed out. All that has done is make things far worse for the country in the future.

    Had the banks, and big 3 had been allowed to crash and burn, new replacements would have been born from the ashes. As long as there is demand there will be businesses grown to supply.

    Minimum wage should be LOWERED – very unpopular opinion. However I would rather work for half the current wage, and have a job than sit around without a job. Local economics and the price of goods and services are primarily based on the average income of the local population.

    2 political parties are not enough we need more choices in candidates. We are not a square or round society.

    There should be no such thing as a “career politician”. How can a man do what is in the best interest of the country if he is worried about how it will affect his career?

    I have met many political leaders, and they are ALL SPINELESS WEASEL’S.

    The tree of liberty must be refreshed from time to time with the blood of patriots & tyrants. – Thomas Jefferson.

    And yes I do know the original context of that quote. The people may be ignorant but they are being wronged, and unless someone takes a stand the spineless weasel’s will continue to do nothing.

    Please feel free to flame this comment. I would much happier if someone could prove me wrong.

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