STAFF NEWS & ANALYSIS
DB Briefs: UD Debt Downgraded / Asian Markets Fall / China Wants Global Currency / ECB Begins Market Intervention
By Staff News & Analysis - August 08, 2011

S&P Downgrades US Credit Rating to AA-Plus … This came after a confusing day of reports: Standard & Poor’s told the U.S. government early Friday afternoon that it was preparing to downgrade the U.S.’s triple-A credit rating but U.S. officials notified S&P that it had made a $2 trillion mathematical error. The error was in the calculation of the U.S. debt-to-GDP ratio over time and was based on a misreading of what the correct congressional baseline was, government sources indicated. – CNBC

Asian Markets Slip on U.S. Credit Downgrade … International markets trembled over the weekend following an unprecedented downgrade of the United States’ sovereign credit rating by the agency Standard & Poor’s. In spite of the S&P downgrade, few on Wall Street are expecting investors to pull out of Treasuries on a large scale, since the bonds are still seen as relatively safe. – Huffington Post

China Blasts U.S. Debt Problems, Urges New Global Reserve Currency … China on Saturday condemned the “short-sighted” political wrangling in the United States over its debt problems and said the world needed a new global stable reserve currency. “International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country,” it said. – Reuters

ECB Says Will “Actively Implement” Bond-Buying … The European Central Bank said on Sunday it would “actively implement” its controversial bond-buying programme to fight the euro zone’s debt crisis, signaling it will buy Spanish and Italian government bonds to halt financial market contagion. … “The Euro system will intervene very significantly on markets and respond in a significant and cohesive way,” a euro zone monetary source said, speaking shortly before the statement was released. – Reuters

S&P Downgrades US Credit Rating to AA-Plus

The United States lost its top-notch triple-A credit rating from Standard & Poor’s Friday, in a dramatic reversal of fortune for the world’s largest economy. … This came after a confusing day of reports: Standard & Poor’s told the U.S. government early Friday afternoon that it was preparing to downgrade the U.S.’s triple-A credit rating but U.S. officials notified S&P that it had made a $2 trillion mathematical error. The error was in the calculation of the U.S. debt-to-GDP ratio over time and was based on a misreading of what the correct congressional baseline was, government sources indicated. They said that once informed of the error S&P revised its rate-cut rationale to emphasize the political aspects of the country’s debt situation. “A judgment flawed by a $2 trillion error speaks for itself,” a Treasury spokesperson said. – CNBC

Dominant Social Theme: You cannot trust the private sector with this sort of thing… the State knows better.

Free-Market Analysis: We have been suggesting for quite a long time now, perhaps ten years or more, in various books, editorials and publications, that the US monetary and political system was in serious trouble and would eventually face a severe “reality check.” Today, we see the headwinds of reality crashing into the structural edifices that have been erected as a means of population control and economic enslavement. The US dollar is a license to steal, one that has been granted via legal tender laws, and the heist has now been revealed to millions during this dawning era of what we call the Internet Reformation. The US political establishment – in this case the Treasury Dept. – can criticize S&P’s downgrade all they like, but the truth of the matter is that the US is broke and soaked in a sea of unsustainable debt. To whine about a $2 trillion “error” – that isn’t really an error at all, considering the Treasury Dept. is disputing S&P’s misuse of “congressional baseline” numbers that somehow accurately forecast the “U.S. debt-to-GDP ratio over time” – is nothing short of laughable. Suffice to say, why should anyone, including S&P, base any of their numbers on congressional baseline numbers when all the government does is tell one lie after another? Does anyone with any semblance of understanding of the fiat-money system really believe that the “wise leaders” acting/running the US are going to master the great ship’s rudder and pull off a last minute “miracle-maneuver,” thus avoiding the treacherous shoals into which it is destined to crash? We think Hurricane Reality is about to teach the “Captains of Fantasy” and their believers a severe lesson. Now, S&P cannot come out and say that, but we can.


Asian Markets Slip on U.S. Credit Downgrade

International markets trembled over the weekend following an unprecedented downgrade of the United States’ sovereign credit rating by the agency Standard & Poor’s. Analysts had feared that the downgrade, in combination with the spiraling European debt crisis, could send overseas investors into a panic and undermine the strength of the global economy. … As of 11 p.m. EST on Sunday, Japan’s Nikkei index had fallen 1.3 percent to 9,178.03, a drop of 121.85 points. Hong Kong’s Hang Seng was down 3.71 percent at 20,169.41, while the South Korean composite index KOSPI had fallen 3.01 percent to 1,885.27. Australia’s S&P/ASX 200 index slipped 1.2 percent to 4,055.80, while New Zealand’s NZX 50 declined 2.49 percent to 3,194.82. In the Middle East, Israel’s TA-25 market fell 7 percent to close at 1,074.27, its biggest decline since 2000. Egypt’s EGX30 fell 4.2 percent. Other markets showed more measured losses: the Abu Dhabi Securities Exchange General Index fell 2.5 percent, while Dubai’s exchange closed 3.7 percent down. … In spite of the S&P downgrade, few on Wall Street are expecting investors to pull out of Treasuries on a large scale, since the bonds are still seen as relatively safe. – Huffington Post

Dominant Social Theme: Don’t believe all the hoopla; US government debt is a safe and stable investment.

Free-Market Analysis: How anyone can suggest that there is anything safe about US government bonds, especially now, is beyond us. But we would expect nothing different of an article that appears in the Huffington Post, a mainstream media player to be sure. To think that people should act like the US Congress and try to solve the fiat-money debt problem by investing in the very problem itself – US debt – is foolish, in our opinion. The article, not surprisingly, mentions nothing about honest money as a safehaven option – despite that fact that gold, trading above $1,700 as of this writing, is up more than 50% in purchasing power over the last three years alone against the US dollar. Does the US dollar, or dollar denominated debt, sound like an investment that is “relatively safe” to you?


China Blasts U.S. Debt Problems, Urges New Global Reserve Currency

China on Saturday condemned the “short-sighted” political wrangling in the United States over its debt problems and said the world needed a new global stable reserve currency. “China, the largest creditor of the world’s sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China’s dollar assets,” China’s official news agency said in a commentary. “International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country,” it said. – Reuters

Dominant Social Theme: It’s time to let Christine Lagarde and the other “wise leaders” at the IMF run the world’s money.

Free-Market Analysis: Well, this certainly comes as no surprise. We have been ringing the bell on this one for a while now. In fact, we ran a staff report back in March 2009, titled China Wants IMF to Manage New One-World Currency. The essence of what we said in that article, as well as many others dealing with Money Power’s insatiable desire to fasten a global currency yoke on the entire world’s population, is that out of the fiat-manufactured chaos we have today, it is likely that global order will be promoted as the cure to all our monetary ills. The IMF, a globalist organization to be sure, along with the World Bank, will be marketed by the establishment politicians, NGO think tanks and mainstream media outlets as the only logical way to alleviate the markets of their instability and overall confusion. The eurozone experiment alone should be enough of a wakeup call – for anyone that cares to see – that stitching together a bunch of systemically bankrupt nations’ fiat currencies does nothing to alleviate the rot inherent in the design and nature of the money-stuff system itself. We truly hope the world escapes from the grasp of the globalists’ fiat-fangs and that this plan of unification does not become a reality. What the world needs, in our opinion, are private currencies competing in a free-marketplace where governments have no involvement in either the issuance of currency or its management. Let the market decide what to use as money and keep the State and unelected global government agencies out of it.


ECB Says Will “Actively Implement” Bond-Buying

The European Central Bank said on Sunday it would “actively implement” its controversial bond-buying programme to fight the eurozone’s debt crisis, signaling it will buy Spanish and Italian government bonds to halt financial market contagion. … “The Euro system will intervene very significantly on markets and respond in a significant and cohesive way,” a euro zone monetary source said, speaking shortly before the statement was released. … The ECB statement sought to justify the buying by saying it was “designed to help restoring a better transmission of our monetary policy decisions taking account of dysfunctional market segments and therefore to ensure price stability in the euro area.” – Reuters

Dominant Social Theme: The dysfunction of the invisible hand must be slapped with oversight and active intervention.

Free-Market Analysis: This is getting just silly. Think about it for a minute. Here comes the ECB to create a US-style Plunge Protection Team that can “intervene” whenever the “wise leaders” feel it is necessary – all for the purposes of shoring up confidence in a dying fiat-money central banking system. The arrogance of Money Power to think that people cannot see this for what it is – blatant manipulation – is simply flabbergasting. The ‘Net dissects the obviousness of such planning and exposes the desperate attempts of those who believe they are smarter than the free market. The name of the game is global power via global governance. To achieve that end, the power elite’s agents will do just about anything in the face of Hurricane Reality to try to justify the means. Once again, the problem facing the world today is the fraudulent nature of the global central banking system and the monetary units they peddle. Creating another manipulation-arm to intervene and “fix” the illusion is no solution at all.

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