US Soverign Debt just downgraded

[ASusilovic]

Maybe gravity is the expression that you will hear a lot in the coming days. And it is referred to the downside that Treasury Bonds and Treasury Notes will experience....

I have already bought my deep OTM puts, did you ????

 

[Swan Noir]

It seems a popular argument in favor of the US Dollar is that there is not an alternative. It was fortuitous that the US was ready as the UK declined. That does not mean that the world will be lucky twice in a row.

Confidence is eroding in the dollar and in fiat currency in general. Confidence is eroding in the political class that rules most industrial nations. The reality is confidence is simply eroding.

If it continues to erode -- and there are many reasons why it should -- the fact that there is nothing to replace the dollar will not be enough for people to believe it is a store of value.

It seems to me in a year or three or five, but probably not longer, there will be hell to pay.

 

[PocketChange]

There is an alternative: Electronic Stored Value

Much like stored value cards used by retailers but made available on an all encompassing international level. Makes sense as a natural progression from coins and paper to an all electronic world currency pegged to the actual value of the purchasing power.

Unfortunately FINCEN still controls trading of anything that can be construed as a currency equivalent as far as US citizens are concerned.

Quote from Swan Noir:

It seems a popular argument in favor of the US Dollar is that there is not an alternative. It was fortuitous that the US was ready as the UK declined. That does not mean that the world will be lucky twice in a row.

Confidence is eroding in the dollar and in fiat currency in general. Confidence is eroding in the political class that rules most industrial nations. The reality is confidence is simply eroding.

If it continues to erode -- and there are many reasons why it should -- the fact that there is nothing to replace the dollar will not be enough for people to believe it is a store of value.

It seems to me in a year or three or five, but probably not longer, there will be hell to pay.

 

[m22au]

Quote from Tsing Tao:

+1

and the title of the thread is completely misleading, as it indicates the US was downgraded by an accredited rating agency.

First of all, Dagong is an accredited rating agency:
http://www.dagongcredit.com/dagongweb/english/aboutus/index.php

http://www.zerohedge.com/article/ch...ees-long-term-recession-blasts-qe2-expects-cr

Second, regardless of your opinion of Dagong agency as a whole, they are far more credible with regards to their assessment of the creditworthiness of the USA, given that S&P and Moodys would not dare to downgrade the country.

Third, I'm don't think the credit rating of the USA really matters that much, because they can pay back government debt by printing fresh currency. Greece, Ireland, Portugal, Spain and Italy don't have the same luxury.

 

[S2007S]

Quote from Tsing Tao:

+1

and the title of the thread is completely misleading, as it indicates the US was downgraded by an accredited rating agency.

All of the sudden another country downgrades US debt and you think the thread is misleading???

Why is that?

 

[dhpar]

Quote from goodgoing:

I downgraded India today from Holy Cow+ to Holy Cow-. So what?

Learn how to spell sovereign before you spew crap facts.

+1


made my day...

 

[Cherrypicker]

Quote from S2007S:

All of the sudden another country downgrades US debt and you think the thread is misleading???

Why is that?

......ignorance is bliss.

 

[latinotrader]

Quote from goodgoing:

I downgraded India today from Holy Cow+ to Holy Cow-. So what?

Learn how to spell sovereign before you spew crap facts.

LOL
Just for fun, How they rate chinese real state? AAA?

 

[macroman]

i'd say it is important. indicationg that chinese (and associates) will buy us debt and require higher payout. In a way, increase in US interest rate. Probably quite substantial. Forcing more priniting. or else.

that cant be good.

 

[pspr]

I prefer to use the Hogwart Credit Rating Agency, Inc. for credit rating comparisons. They are superior to any Chinese Dragon rating company. And here is why:

Dagong Global Credit Rating Co., the Chinese rating company that was recently rejected in its bid to be an officially recognized bond rater in the U.S.....

Needless to say, the markets don’t find this (rating) credible.

http://blogs.wsj.com/marketbeat/2010/11/09/chinese-credit-rater-downgrades-us/