Saturday, September 20, 2014

Triple A Standard for the USA? Kidding, right?

Rating bureau Fitch just announced and confirmed the "triple A" rating for the USA because (quote) "The United States currently benefit from an exceptional financial flexibility (...) and are in possession of the most liquid capital market in the world"

According to Fitch in the same communiqué, a few things mean that the USA can carry a higher burden of national debt than most other countries which have a tripple A rating.

Fitch goes on to emphasize that "The American economy is one of the most productive and dynamic and has a technology which is the most advanced in the world".  Fitch also stated it will not change this tripple A status in the course of the coming months...

Oh boy...

Remember folks that Fitch was one of those Rating Bureaus that gave the Lehman Brothers bank an AAA rating as late as the night before they went bankrupt!

And financial flexibility?  Sure.  But not because the American economy is doing great.  In fact, the economy is doing very, very bad.  This financial flexibility comes from the fact that the Federal Reserve has been printing money like mad to keep up with the losses and stabilize the market.

Another big mistake which seems to be a sign of the (financial) times, is that nowadays, so-called "experts" look at the stock market to tell how an economy is doing.  Wrong!

The stock market only indicates how good, well, the stock market is doing.

Stock markets are completely artificial because the rise or fall or even the worth of stock is being steered by rumours and/or speculation.

For instance and as an example, why are we paying a hole in our pocket for car fuel?  Because unrest in the Middle East could lead to shortage.  Shortage would mean higher prices for a barrel of crude and thus less profit on the British/American oil market in London.   Shortage would also make the economy go down.

Now, the funny thing is that because of this speculated "could be" scenario, the brokers panic and this panic makes the price of oil on the market go up anyway.

But, because there's no shortage, the economy doesn't suffer.  Nope.  It just makes you and me cough up a lot more cash when filling the reservoir of our means of transport.

The only people wo stand to benefit are the ones doing the trading.  Not the OPEC (Oil Producing & Exporting Countries) because the base price which the oil market pays to the Arabs and Venezuela doesn't go up.  Only the sales price on the market once the oil has been purchased by that market.

In other words, because of this fear that something might go wrong in the Middle East and that there is a possibility that there would be a shortage, the prices are artificially blown out of proportion, with huge profits for those who own the oil industries.

Now, of course, the thing to do is to make sure that the threat of a conflict in the Middle East never goes away, so that the prices stay artificially high, and you're set for life.

But to come back to Fitch and its ludicrous rating of the US economy: the US are bankrupt.  Even more so than Greece ever was.  The US deficit has so many zeros at the end I don't even know anymore what its called like.  Trillion? Zillion?

A survey done in 2007 brought to the light that of all the Dollars in circulation in the USA, exactly 3% was paper money.  Three percent.  All the rest was electronic money which only exists in the books of the banks.

And the situation hasn't bettered since, just because the economy is going down the drain as well, thanks to more technical and skilled jobs being outsourced to Europe, China and a handful of other countries around the world.

The only thing which keeps America afloat is the aformentioned fact that the Federal Reserve -which is a private bank, by the way- keeps printing money like there's no tomorrow (which there probably isn't anyway); and because the US Dollar is still being used as world trading currency.

Because of the latter, all non-US banks keep buying Dollars by the truckload, since they're using it for trading on the markets anyway.  This allows the Dollar to not fall but on the contrary keep a stable value...

But in the end it's just a smokescreen.  The financial pit the US has dug for itself is meanwhile so big that no amount of printing extra cash can stop the downfall.

No rating bureau can stop that either, despite bogus triple A announcements...


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