In a post on Friday I observed that it was only a matter of time until the sheep simply began to tune-out the jabbering Fed-heads, because (a) they NEVER shut up; and (b) they utter TOTALLY CONTRADICTORY thoughts more and more often (which confuses the sheep and hurts their tiny minds).

Similarly, it is only a matter of time until the fraudulent credit ratings agencies (chief accomplies of the Wall Street terrorists) are also completely ignored by the sheep. In their case it won't be "lack of consistency" (LOL!!).

Indeed, S&P already found out how "unfriendly" the banksters become to anyone who refuses to read from the banksters' script - when S&P (partially) stripped the U.S. of its fraudulent "AAA" rating.

So TODAY, with even the other two fraudsters (Moody's and Fitch) threatening to strip the UK of its equally fraudulent "AAA" rating we see S&P refusing to BUDGE from the "AAA" script.

Note that the UK economy is degenerating EXACTLY as occurred in Greece. More and more austerity is causing the economy (and revenues) to SHRINK - leading to even larger deficits. Here's a question which the Friedman Fascists imposing this austerity will never answer (because they CAN never answer it):

How does "austerity" ever produce a balanced budget when the MORE harsh the austerity is, the BIGGER the deficits get? Obviously you can't "balance a budget" by DOUBLING the size of the deficit.



There is ONE (and only one) difference between Greece's economy and the UK's economy: since there is no economic terrorism being inflicted upon the UK (via CDS manipulation) the UK continues to pay near-zero interest rates on its debt (while its economy collapses).

On the other hand, regular readers will recall that at one point the terrorists had pushed up Greek interest rates above 100%. Note that if EITHER the U.S. or UK had their interest rates pushed to similar levels that their economies would collapse FASTER than Greece's - since they would have to try to flog TEN TIMES the quantity of (worthless bonds) on hostile buyers.

Understand that the fraudulent credit ratings and fraudulent interest rates which the terrorists have maintained in the U.S. and UK will not PREVENT the bankruptcy of either of those nations - it only DELAYS it for a few years...


"U.K. Keeps Stable AAA Outlook as S&P Disagrees With Fitch"

www.bloomberg.com/news/2012-04-13/u-k-s-...bt-seen-peaking.html

Britain kept its AAA grade with a stable outlook at Standard & Poor’s as the ratings company disagreed with Moody’s Investors Service and Fitch Ratings on the risks to the government’s ability to pay its debts.

The coalition led by Prime Minister David Cameron will succeed in maintaining its focus on curbing the budget deficit, S&P said in a statement yesterday in London, as it praised the nation’s political institutions for their capacity to react “quickly” to economic challenges.

“The stable outlook reflects our current expectation that the U.K. government will implement the bulk of its fiscal consolidation program and that economic growth will not falter more than what we currently project,” the ratings company said in the statement.

The decision contrasts with those of Moody’s and Fitch, both of which warned in the past two months that the U.K. faces the risk of losing its top grade. Chancellor of the Exchequer George Osborne has drawn on such threats to insist that the government “cannot waver” from its deficit-cutting commitment, which he reaffirmed in his March 21 budget.

“The budget showed we are ready to go on making the difficult decisions that are keeping our country safe,” Osborne said in a statement yesterday. S&P’s AAA rating “is a reminder that Britain is weathering the international debt storms because of the policies we have adopted and stuck to in tough times,” he said.
Drag on Growth

While the government’s austerity plan will “likely drag on economic growth,” S&P said that “the U.K. economy’s capacity to absorb shocks has improved.”

S&P also forecast the U.K. deficit will reach 4 percent of gross domestic product in the fiscal year ending in 2016, more than the 2.9 percent government estimate, as economic growth will probably fall short of the Office for Budget Responsibility’s forecasts. Government debt will peak in 2014, the ratings company said.

Osborne last month maintained his plan to eliminate most of the budget deficit by 2017 in the biggest squeeze on public spending since World War II.

Moody’s published its decision to place the U.K.’s rating on negative outlook on Feb. 14, saying that the nation risks losing the grade if the economy deteriorates. Fitch followed on March 15, less than a week before the budget, noting that Britain has a limited ability to deal with shocks.

“We expect the U.K. political consensus on fiscal policy will broadly hold for the near future, and that the government will implement the measures specified in its fiscal consolidation program in order to achieve its targeted savings,” S&P said in its statement yesterday.

The stable outlook reflects S&P’s view that the government can keep cutting the deficit, that net debt as a percentage of GDP will stabilize by 2014, and that “the economic recovery will gain traction over the medium term,” the ratings company said.

As a "P.S.", let me add a general point which I meant to add to the prevoius post.

The GENERAL reason why the lying Fed-heads and the lying ratings agencies will soon be totally tuned-out (even by the clueless sheep) is Boy Who Cried Wolf Syndrome.

The progression for ALL compulsive liars is the same:

1) They BEGIN lying and things are "wonderful", because people TRUST the liars (since they hadn't deceived people previously).

2) They begin to tell MORE lies, since deceiving the sheep is so fun-and-profitable, AND even with the increasing frequency of their lies the sheep STILL believe everything they are told. This causes the liars to get ARROGANT.

3) The liars begin telling LARGER and MORE OUTRAGEOUS lies - while also continuing to increase the FREQUENCY of their lies. There are two reasons for this. Their rising arrogance makes them OVER-USE this tactic, and (more importantly) the sheer quantity of their lies means that their lies have begun to contradict each other - which itself requires more lies and larger lies to "explain" the contradictions.

This is the point where ALL compulsive liars inevitably self-destruct. They are STILL just as arrogant. However now the blatant contradictions and more outrageous (i.e. less-believable) lies means that exponentially increasing numbers of the sheep begin to see through the Liars.

This is what happened in the Soviet Union with Pravda. It will happen VERY soon with the Western media (if it hasn't started already).

Jeff

Although the UK is the most indebted nation on earth - by total debt to GDP - the ratings agencies are only rating the default risk on sovereign bonds.

As Mervyn has demonstrated not only intent, but actual ability, to print money; the buyers will get paid. What they'll be able to buy with that payment, after an unusually long average of 14 years, is a different matter; but stupidity is not a factor the ratings agencies take into account.

Screwloose wrote:
Jeff

Although the UK is the most indebted nation on earth - by total debt to GDP - the ratings agencies are only rating the default risk on sovereign bonds.

As Mervyn has demonstrated not only intent, but actual ability, to print money; the buyers will get paid. What they'll be able to buy with that payment, after an unusually long average of 14 years, is a different matter; but stupidity is not a factor the ratings agencies take into account.

Screwloose, one of the most ludicrous myths of the money-printers is that if you have your own printing-press "you can't go bankrupt."



True, over the SHORT TERM the money-printers can delay bankruptcy by printing up a HUGE stack of paper to cover the latest deficit. This presents TWO possibilities:

a) The money-printer refuses to pay enough interest and NO ONE will touch will touch this depreciating paper. Think ANYONE is stupid enough to buy a bond paying 5% per year with a currency losing 20% or 50% or 100% per year?

b) They pay enough interest to attract BUYERS for their bonds...but then they ARE bankrupted by the interest payments.



The ONLY difference between the U.S./UK and the REST of the debt-sinners is that the U.S./UK can DELAY their own bankruptcy by a few more months...

Jeff

I didn't say 'go bankrupt' - just the default risk on issued bonds.

Failed bond issuance is a different matter. Yes; it can affect the ability to roll-over existing debt, but the entire float can be redeemed with a printing press if needed - that useful 14-year average duration will make the sums to cover look trivial in hyper-inflated money. Imagine how easy it was for Gideon Gono to redeem a 30-year ZIM$10,000 bond - pocket change.

You should also factor in that, through the magic of QE, the BoE already owns about 2/3rds of the entire Gilt float - so redeeming them is just an internal ledger entry.

I found it significant that the BoE staff pension fund transferred all its bond holdings into CPI-linked Gilts (TIPS equivalent) four years ago - which is why I keep all my savings in gold and silver...

Screwloose wrote:
Jeff

I didn't say 'go bankrupt' - just the default risk on issued bonds.

Failed bond issuance is a different matter. Yes; it can affect the ability to roll-over existing debt, but the entire float can be redeemed with a printing press if needed - that useful 14-year average duration will make the sums to cover look trivial in hyper-inflated money. Imagine how easy it was for Gideon Gono to redeem a 30-year ZIM$10,000 bond - pocket change.

You should also factor in that, through the magic of QE, the BoE already owns about 2/3rds of the entire Gilt float - so redeeming them is just an internal ledger entry.

I found it significant that the BoE staff pension fund transferred all its bond holdings into CPI-linked Gilts (TIPS equivalent) four years ago - which is why I keep all my savings in gold and silver...

Screwloose, if you believe what I've written in the past ("Maximum Fraud in U.S. Treasuries Market"), bankruptcy and falied bond-auctions are two sides of the same coin.

We have the U.S. forced to maintain permanent (fraudulent) 0% interest rates - because the government can't afford to pay any interest on its bonds. That's the only way it can fend-off bankruptcy TODAY.

But because there are no BUYERS for U.S. Treasuries at those fraudulent (and not enough buyers at ANY price) we have B.S. Bernanke secretly and illegally COUNTERFEITING U.S. currency in order to buy up all that worthless paper - and thus prevent an OFFICIAL FAILURE at a U.S. Treasuries auction.

Thus the U.S. economy is ALREADY at the point where the only way it can avoid IMMEDIATE bankruptcy and IMMEDIATE failure in its bond auctions is through counterfeiting U.S. currencies to fraudulently soak-up all that paper.

Note that the Treasuries auctions procedures (to make those auctions totally opaque) was done at EXACTLY the same time that the U.S. went to permanent 0% interest rates - because since that time there has OBVIOUSLY been no buyers willing to pay the highest prices in history for totally worthless bonds.

Jeff

I agree completely with that; I was merely pointing out the difference between bankruptcy/failed bond issuance and default risk on existing bonds.

A country can be completely insolvent and headed for hell - but can still have no risk of default on its existing bonds, if it is willing to print the money to redeem them.

S&P aren't rating the country's solvency; they're rating the default risk on its bonds.

Screwloose wrote:

A country can be completely insolvent and headed for hell - but can still have no risk of default on its existing bonds, if it is willing to print the money to redeem them.


Screwloose, that is EXACTLY how the propaganda machine characterize that issue, and in that form it is grossly misleading AND a complete over-simplification.

Yes, for the MOMENT a nation can stave-off bankruptcy (and formal default on its bonds) by printing more money...but at what cost?

1) Diluting the currency drives away currency-holders (i.e. bond-buyers) thus requiring substantially higher interest rates to attract future buyers for all NEW debt (including rolling-over the endless $TRILLIONS of existing debt).

2) This means MUCH higher interest rates (and interest PAYMENTS) on all new and existing debt. Thus at some VERY finite level, every new dollar created adds MORE THAN $1 in new interest payments - making these Ponzi-scheme economies LESS SOLVENT rather than more solvent by printing more money.

Just as it was NEVER feasible (on the basis of simple arithmetic) for our economies to keep adding more and more debt, so too it has NEVER been feasible (again as a matter of simple arithmetic/economics) for nations to print their way out of formal bankruptcy on into infinity.

This is WHY the U.S. has to maintain its fraudulent 0% interest rates. It is already PAST THAT POINT. If it's currency creation was LEGITIMATE and its bond market not totally rigged, the United States would have already been forced into BANKRUPTCY - despite its printing press.

Jeff

Once again; I completely agree. Printing has been tried hundreds of times since 1060 in China and has always destroyed the currency concerned - that's why not 1% of my assets are held in GBP.

The UK's debt situation is hopeless - but you cannot default on bonds denominated in your own currency if you're willing to print. That's the only reason that - in nominal terms - default-risk on the UK's bonds is rated as negligible.

S&P deliberately avoid rating for value returned - they'd have to rate all currencies for future devaluation risk against gold as the AAA benchmark. I can't see that going down well at the Marriner Eccles Building... (C-minus..?)

Just across the Channel (La Manche looking north) the situation is very different, even for countries with far less total debt. Their bond liabilities are in a currency that they don't control - effectively in a foreign currency - which is why their bond default risk is verging on banana republic territory.