S&P HITS USA! IT’S LOOKING BAD!
The Power Group that runs USA got a slap in the face today.
Standard & Poors, the rating group that made some gross errors in the Sub-Prime fracas, suddenly placed USA closer to Greece and Portugal.
“You’re still AAA, but we think you might drop down a notch or two.”
World investors started shooting out of American stocks. The Dow Jones dropped two hundred points at the opening. But, the Power Group’s front line came forward in the Media with assurances that all was well and the people of the USA needed four more years of the Obama/Bernanke/Geithner Team.
WHY LOWER “THE HOME OF THE FREE” RATING?
Is the U.S. like Greece, Portugal and Ireland?
LET US TAKE A LOOK
Here is a graph of U.S. Debt versus U.S. GDP…
The S&P analysts have these graphs nailed to their desks. Compare the U.S. Graph with the PIGS GRAPH…
Do they look similar? Then they should have similar ratings.
BUT AMERICANS WORK HARDER
Some Americans work very hard. But, a large quantity don’t even work. And the rich ones use every tax break in the book.
As Yahoo says:
“They have tax breaks for having children, paying a mortgage, going to college, and even for paying other taxes. Plus, the top rate on capital gains is only 15 percent. There are so many breaks that 45 percent of U.S. households will pay no federal income tax for 2010, according to estimates by the Tax Policy Center, a Washington think tank.”
CONCLUSION
This event is a rude awakening only to the unsophisticated world investors.
All the facts concerning the U.S. political scene, its demographics, its corruption on every level–were well known for the last decade.
Sophisticated world investors are invested in non-corrupt countries such as Canada, Australia Norway and Switzerland. They are also invested in the commodity that doesn’t rust.
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