Monday , 20 May 2024

The Great American Debt Downgrade Debacle That Wasn’t!

It’s been exactly two years since Standard & Poor’s did the unthinkable anddebt-ceiling downgraded the U.S. government’s debt rating…and yet, it’s as if it never happened…

So writes Louis Basenese ( in edited excerpts from his original article* entitled A $7-Trillion, Currency Catch-22.

[The following article is presented by  Lorimer Wilson, editor of and and the FREE Market Intelligence Report newsletter (sample here – register here) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]

Basenese goes on to say in further edited excerpts:

Falling credit-default swap prices

Credit-default swap prices, which represent the cost to insure against a U.S. default, dropped to 22 basis points recently. That’s down from a high of 55 basis points right after the downgrade.

Increasing debt levels

More amazing than the drop in default risk is that it came in the face of steadily increasing debt levels – and the fact that there’s no end in sight to Washington’s borrowing ways.

Rising Debt-to-GDP ratio

S&P now expects the amount of general U.S. government debt to hit 84% of GDP by 2015, up from their previous projection of 79% at the time of the debt downgrade, so America’s finances have only gotten worse, not better.

Strengthening U.S dollar

Against that backdrop, it’s even more unfathomable that the U.S. dollar has been on a tear.

The world’s most despised currency is up 11% since the downgrade, as represented by the U.S. Dollar Index and, so far in 2013, it’s on track for its biggest gain in five years.


Question: So whom do we have to thank for the unexpected resiliency and strength and in whom should we put our trust for the future?

Answer: A group of do-nothing elected officials.

Indeed, we’re on a crash course with another debt ceiling debate, which is precisely what precipitated the first debt downgrade by S&P……

Talk about the great American debt downgrade debacle that wasn’t!

Ahead of the tape,

Louis Basenese

[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]

* (© 2013 Wall Street Daily, LLC. All rights reserved.)

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One comment

  1. Call it what you will, the Central Bankers are now subject to the fiscal whims of the Mega Banks which are now not only international but owe (pun intended) no allegiance to any Country, striving instead to seek out the lowest taxed locations from which to operate without fear of lawsuit.

    Look to one or more new very tiny islands or even small Countries to be controlled if not “owned” by one or more of these Mega Banks (Think Fiscal UN), which will allow them to rule their own fiscal future passing “local laws” that they wish to comply with for their own benefit! Image MBI (Mega bank Island) controlling a large percentage of the wealth of the planet and the potential of setting up their own currency which would then be used by the bank in all transactions, much like the US$ is used today!

    The only thing that can limit this “fiscal flight” is if Countries start taxing profits made “overseas,” a concept which will be strongly objected to as needed, by the Mega Banks political supporters whose own wealth will increase since they will also have secret deferred accounts at these Mega Banks, that they don’t want to be taxed, much less known about!

    Global Fiscal Domination will soon rule the Planet, thanks to the Central Bankers looking out more for what is good for their Ultra Wealthy supporters than for what is best for the over whelming majority of their Countrymen.