Day 1 of the fall of the U.S. Empire

[frankthring]

It is very difficult to pinpoint when things start in history. I would suggest
that the news that the USA has lost its top credit rating is one such day.
It will inevitably lead to a decliine in the USA as a world power. Why ?
Because the global financial world needs security and slowly slowly....drip,
drip, drip, they will take their investments out of dollars and also, if doing
biz with USA, charge higher rates of interest.
Rome`s Empire lasted 500 years before a slow decline. Britain`s ran from
the Seven Years War to 1945 approx (about 190 years) and the USA has
been top dog since then. So its had a 66 year run. You will now see a
gradual 50 year decline.
And remember this. China has 3 times the population of the USA. The
American economy will have to be 3 times as viable as China just to keep
pace. Its impossible !

[jimslip]

Don't be too ready to right off the Yanks just yet, Frank Thring! China's economy still produces masses of total shite and originates nothing at all. The Americans have companies like Apple that produce the most amazing technology and myriads of others as well. They have NASA and the Space Programme, from which stacks of innovation trickles down to us and our manufaccturing processes. Being a "Technophobe" you would have no idea as to the future importance of such innovation. Sure, the Chinese can knock up 10's thousands of cheap cars and dodgy Rolex's, whilst causing the worst pollution in the World. But the Yanks are miles ahead in technological innovation and this is what the World will need in the future.

If this is the "New Dawn" of the Chinese Empire, then God help us all!

[img]http://www.treehugger.com/468_china-pol ... ob-001.jpg[/img]

[img]http://images.nationalgeographic.com/wp ... 00x450.jpg[/img]

[Peter]

I knew the experiment with Independence was doomed to failure. They'll be back, begging us to take them back into the Empire soon enough.

[Lizard]

My granny has more money in her coop savings account than than the federal reserve, also she hates chinese, give her an indian any day .

[David Johnson]

Frank,

The US credit worthiness has been downgraded by just one of the credit agencies, Standard and Poor's. Apparently it was because said agency wanted to see $4trillion reduction in government spending in the next 10 years as opposed to $2trillion which was agreed.

This is an obvious case of the lunatics taking over the asylum. This is the very same credit agency which gave Triple A credit ratings to the companies selling bundles of worthless mortgage deals to unsuspecting mugs who didn't have a clue what they were buying i.e. a key factor in the credit crunch starting in the first place.

Taking notice of Standard and Poor's view of your credit rating seems to me to be similar to asking a 2 year old to evaluate Einstein's Theory of Relativity. Nothing wrong doing it, but don't take the result too seriously.

Cheers
D

[Arginald Valleywater]

But DJ the shitheads on Wall St will be running scared and will no doubt panic sell on Monday and screw the rest of the markets. Wonder what would happen if the IMF said shut down the stock exchanges for a month and lets all sit down over a cup of tea and get everyone's bad debts out in the open. Only then can Bankers have the remotest trust of Mr J Public ....

[Robches]

David:

US GDP is about $14 trillion. The US debt is about $14 trillion. A debt to GDP ratio of 100% is very unhealthy. Under present projections, by 2020 US debt will either be $22 trillion according to S&P or $20 trillion according to the US government. So it has taken from 1776 to 2011 to accumulate a debt of $14 trillion, but only 9 years to add an extra $6 or $8 trillion. I am only surprised that S&P have downgraded the USA to AA+, I think that flatters them. It has come to something when the Chinese government has to tell the USA to get its house in order. The fact is that the USA is in a deep hole, it has little prospect of repaying the debt it already has, much less a debt increased by half in just 9 years.

[David Johnson]

http://bgafd.co.uk/forum/read.php?f=3&i=248411&t=248333

[David Johnson]

"But DJ the shitheads on Wall St will be running scared and will no doubt panic sell on Monday and screw the rest of the markets."

Agreed. This is a likely scenario. The people who run these markets are part of the lunatic fringe running the asylum. In many cases what happens in these markets is governed by complex risk management software which seems to have panic built in. Certainly the risk management software used by investment banks was no bloody good at all at preventing the banking crash in 2008.

It makes me laugh when I see these fund managers and bankers like Bob Diamond who heads up Barclays, going on about the need for continued austerity. If you talked about extra taxes and cuts on their bonuses as part of this "needed austerity" they start squealing like stuck pigs. What they mean by austerity is austerity for the poor and the suckers who are less well off.

Cheers
D

[frankthring]

Robches you are right....and Mr Johnson you are living in some cloud
cuckoo land if you fail to miss my point (and I credit you as a bright
intellectual guy). It matters not a drop if you think the credit agency
that downgraded the USA is a reliable organization or not....David,
the damage is done ! Of course the other credit ratings agencies may
also down grade too. But even if they don`t banks and financial houses
will now cynically, quietly, furtively and slowly treat the USA as a bad risk.
.....The USA is so powerful and so rich, with such a mass of population,
that it will take ages before you clearly see the effects but see them you
will....So join me in a glass of claret and say "farewell US hegemony" ,
because short of an act of God or a nuclear war, the USA will gradually
lose their economic No 1 spot. Hello China ! Start selling your porn there !