Friday, January 28, 2011

Credt Rating Risk

You guys have all heard me explain how the U.S. is having problems paying back it's debt even when all $14 trillion of it has an average rate of say 3% interest.

But what if it loses it's credit rating and our creditors start demanding 6%?

It would NOT be good...and that is an understatement.

Today's headline may give us a foreshadowing of where we are going;

U.S. and Japan warned by IMF and rating agencies on debt

WASHINGTON, Jan. 28, 2011 (Reuters) — The United States and Japan received sharp warnings from the IMF and ratings agencies on Thursday that they must tackle their huge budget deficits to avoid investors dumping their bonds, which would create a sovereign debt crisis and push up their borrowing costs.

See it here; http://www.newsdaily.com/stories/tre70q8ji-us-usa-ratings-moodys/

I smell a pickle.

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