Demise: It's the dollar, not S&PSubmitted by Mark Twain on Sun, 08/14/2011 - 12:53
; and all must have prizes
By Chris Powell, Editor, Journal Inquirer. Published: August 11, 2011
Published: Thursday, August 11, 2011 10:39 AM EDT
Standard & Poor's is catching hell for cutting the credit rating of the U.S. government and threatening to cut the credit rating of other governments... With Italy's penchant for comic opera, prosecutors in Milan have even raided S&P's office there in pursuit of evidence for a "charge" of unfairly criticizing the country's financial system.
Yes, S&P long awarded spotless credit ratings to what were essentially frauds, so the agency's credibility is less "standard" than "poor." ...
Further, these days there is no genuine market for U.S. government bonds, as most are being purchased by the Fed and by foreign central banks as a matter of trying to hold the world financial system together. Without such purchases, particularly by China and Japan, there's no telling what U.S. government bonds would be worth, if anything. And since there really is no repayment of U.S. government bonds anyway, old bonds being retired only through issuance of new bonds with the government's net debt always increasing, the solvency of the government became irrelevant to its debt long ago.
... "flexible currency," has always been the very point of central banking.
... the value of the currency and, more so, the location of the power to determine that value are what the argument should be about, not whether a ratings agency exceeded its competence.
"Everybody has won," said the dodo bird in "Alice in Wonderland," "and all must have prizes." This policy considerably diminished the prizes, and poor Alice got only a thimble out of it...
Fed Inflates Itself Beyond "Alice in Wonderland" ... $2 Quadrillion by Mark Twain 2011