Ratings firm Egan-Jones cut its credit rating on the U.S. government to “AA -” from “AA,” citing its opinion that quantitative easing from the Federal Reserve would hurt the U.S. economy and the country’s credit quality.
The Fed on Thursday said it would pump $40 billion into the U.S. economy each month until it saw a sustained upturn in the weak jobs market. To read about Four Things That Could Go Wrong with the Fed’s plan, click here. Not mentioned is another problem. That being the fact that all of our good jobs have been sent overseas. We are now officially a service economy, and job growth is extremely difficult for a ‘Service Economy’.
In its downgrade, the firm (Egan-Jones) said that issuing more currency and depressing interest rates through purchasing mortgage-backed securities does little to raise the U.S.’s real GDP (gross domestic product), but reduces the value of the dollar. In turn, this increases the cost of commodities, which will pressure the profitability of businesses and increase the costs of consumers thereby reducing consumer purchasing power. As if this weren’t enough, there will most likely be more downgrades to come soon.
None of this says anything about the proposed Obama Tax Increases slated to hit every working American on the first of next year.
If you hadn’t noticed any of this yet, you’d better wake up and get ready for a very long and rough ride downwards. It’s coming… Did I mention Gold & Silver earlier?