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S&P Rating Agency May Soon Downgrade U.S. Debt From AAA
Posted By admin On August 5, 2011 @ 3:34 pm In Featured Stories | Comments Disabled
August 5, 2011
According to ABC News , the bond rating agency Standard & Poor’s is ready to downgrade the rating of U.S. debt from its current AAA value.
The downgraded rating will be either AA+ or AA.
Officials say the reason for the downgrade is political confusion surrounding the recent debate about raising the debt ceiling and a lack of confidence that the government will be able to reduce its profligate spending.
In mid-July, Standard & Poor’s placed the U.S. government on “CreditWatch with negative implications.”
“[O]wing to the dynamics of the political debate on the debt ceiling, there is at least a one-in-two likelihood that we could lower the long-term rating on the U.S. within the next 90 days,” the agency said in a statement .
A downgrade will have a negative effect on U.S. bonds. The government will have to pay a higher interest rate to bond investors and the bonds would be considered a riskier asset. Investors instead would look to Germany, France, Great Britain and Canada as a more reliable investment.
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URL to article: http://www.prisonplanet.com/sp-rating-agency-may-soon-downgrade-u-s-debt-from-aaa.html
URLs in this post:
 ABC News: http://blogs.abcnews.com/politicalpunch/2011/08/govt-official-us-expecting-sp-downgrade.html
 statement: http://money.cnn.com/2011/07/14/news/economy/debt_ceiling_credit_warning/index.htm
 Rating Agency Wars 2: The New Evil Empire Strikes Back – Dagong Says Likely To Downgrade US Even If Debt Limit Raised: http://www.prisonplanet.com/rating-agency-wars-2-the-new-evil-empire-strikes-back-dagong-says-likely-to-downgrade-us-even-if-debt-limit-raised.html
 Moody’s Put Spain’s Aa1 Rating On Downgrade Review, EURUSD Meets Gravity: http://www.prisonplanet.com/moodys-put-spains-aa1-rating-on-downgrade-review-eurusd-meets-gravity.html
 AAA Rating Tough to Defend as U.S. Debt Soars: http://www.prisonplanet.com/aaa-rating-tough-to-defend-as-u-s-debt-soars.html
 Moody’s July 4 Bomb: Rating Agency Finds 10% Of Chinese GDP Is Bad Debt, Claims “China Debt Problem Bigger Than Stated”: http://www.prisonplanet.com/moodys-july-4-bomb-rating-agency-finds-10-of-chinese-gdp-is-bad-debt-claims-china-debt-problem-bigger-than-stated.html
 Ron Paul: Tea Party not to blame for Standard & Poor’s downgrade: http://www.prisonplanet.com/ron-paul-tea-party-not-to-blame-for-standard-poor%e2%80%99s-downgrade.html
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