pslewis

This will send the world into shock and panic ..... this is the start of the second dip, and it will be bigger than the first!!

"A government official tells ABC News that the federal government is expecting and preparing for bond rating agency Standard & Poor’s to downgrade the rating of US debt from its current AAA value"

http://blogs.abcnews.com/politicalpu...downgrade.html

Dedrater

ABC news is like our version of the Sky News, need I say more.

SJ_Skyline

This would never have happened if our American cousins drank tea rather than dumping it in the sea

fast bloke

Pete is on the money for this. This (the next) global recession will make the 07/08/09/10/11 credit crunch look like a minor blimp. I am generally an optimist, but I cannot see any escape from this. Usually, in a time of economic crisis, some people make money and most people lose money. I think this one will be measured by a ratio of suicide v's bankruptcy.

pslewis

I cannot see any other way out than for every country to default, pretty much.

We (all of us) cannot afford to pay back what we have borrowed .... sadly, pensions and savings will be wiped out

bigsinky

$330,000 for every man, woman and child in the States about sums it up. as someone has said before Obama's spending has made other presidents fiscal dexterity look like chicken feed. simple cause and effect. my old economics teacher likened an economy to a oil supertanker. if you wanted to berth in a harbour you stuck the engine in reverse 10 miles out to sea. changes in the now have long term disastrous effects in the future. the long term effect of this will last for a century.

bigsinky

but you will be ok pete having amassed a small fortune on your extortionate wage eh?

David Lock

Lousy brakes then

The rot had set in well before the US credit rating business which the markets had more or less taken into account.

Doesn't look good though does it? And not helped by the whole bang shoot being largely controlled by politicians who, if they aren't corrupt, have their own agendas and don't really know what they are up to. And to be fair I am not sure that many people do!!

As for Europe I can't see that running weak and strong economies with the same monetary unit ever stood a snowball's chance of succeeding.

dl

Trout

iTrader: (1)

England, Scotland, Wales and Northern Ireland?




On a serious note, I think the most annoyed country will be China, they carry more long term US debt than anyone!!!!!


As for Obamas spend - is that true or simply right wing hype?

bigsinky

probably. you know what they say. there's lies, damned lies and american fiscal policy.

time to crack open the bill and melinda gates foundation piggy bank me thinks

paulr

Except Americans themselves. 1.4tn next to 10tn.

Libya has oneof the lowest National Debts at 3.5% GDP.

GlesgaKiss

For years anyone publicly warning of a U.S. default or serious problems at least as a result of their policies was laughed at by the majority of orthodox economists. Who's laughing now I wonder? Things will continue to chug along nicely for a while though I'm sure. U.S. yields are at all time lows.

dpb

It was always going to take this for america to have a health service coupled with china emerging , and the chinese accepting to work for the good of the state ! ?

GlesgaKiss

The Chinese accept to work for very little because little over a few decades ago they nearly starved to death. That's why they will eat these soft socialistic democracies for breakfast. They believe in the market and hard work. We believe in being looked after by the state. It's ironic how communist China is actually a great deal less socialist than much of Europe.

David Lock

I see that China is now starting to flex its rather large financial muscle and is beginning to tell USA what to do bearing in mind China has $1.4 trillion dollar's worth of investments in the place.

No doubt most Americans haven't a clue where China is and many probably think it's a little Island off mainland Hong Kong

dl

ALi-B

iTrader: (1)

Unofficially I doubt the USA has been treated as 'AAA' for a long time. Otherwise, we would have seen more daring investment movement rather than the reverse.

It was the 'AAA' bulls**t used when selling securities that got everyone into this mess in the first place. Stuff being sold as AAA was nothing of the sort.

J4CKO

iTrader: (1)

Yes, I think we are now buggered as we have been paying for the scope creep of the welfare state, it used to be a last ditch safety net, now its a lifestyle choice and our daft government lets all and sundry in to enjoy the system, all paid for on borrowed money, all doled out by well meaning but clueless councils.

I think we are on for some serious austerity, we are being squeezed by high inflation, low wage increases, tax increases and greedy foreign energy companies hiking prices because we are now reliant on them.

I think benefits will have to come down even further, if you haven't got the money you cant give it out, maybe the link between working and eating will be re-introduced ?

I think we have had the zenith of leisure time, disposable income and consuming stuff, only way is down.

hodgy0_2

Maybe paying mediocre businessmen and executives 1000 of millions of pound over the last 20 years has some sort of consequence
As I said in a similar post, take the US car industry, lots of highly paid people producing total **** products for the last 30 years, with no investment except in executive pay
Then the whole US car industry had to get bailed out, with was a Bush initiative, should have let it fail imo

paulr

Not really. They dont accept working for little, they have no choice. I get fed up of people saying that foreigners work much harder than us, and we are fundamentally lazy. Total rubbish.

(I work in warehousing, 14 years of employing,sacking and working with people from all over the world)

GlesgaKiss

Exactly, and that's the way of the market. We only demand more because we have high minimum wages and all sorts of employment regulations. But that has gradually been brought in due to political pressure. The Chinese govt does not yet bow to this.

Maybe minimum wages and regulations are a good thing in your opinion, but the fact is that, in a market economy, we will as a result of that be out-competed in every area. And of course all these comforts also have a cost, whether it be more time taken to do something or more resources required, which puts up the price of everything we want to buy.

So just to summarise: we want to spend less time working than the Chinese, with less effort during that time and to take precautions to be more safe, which consumes more resources making the process less efficient. We also want more stuff for that reduced time and effort and those extra resources spent, and to distribute other resources to make incomes more equal and life generally more comfortable - after all that we expect to be richer.

Can't have your cake and eat it, I'm afraid.

pslewis

When you look at the world Economies China and Germany stand out like beacons.

China are great because their populous will work for very little and do not demand to be looked after and do not aspire to consumption .... the Germans are, as always, ruthless in their efficiency - you get what you deserve mentallity.

You look at the US and the UK ... we have hoards living on benefits - feeding off the hard work of others, being a drag on society and contributing nothing.

The Spanish and Portuguese .. with the Greeks, and Italy are not renowned for their hard work and diligence ..... Italian products are total crap - Spanish built cars (in the 70's were known to be the worst of the Ford range).

Only the nations who work, and reward hard work and quality goods will see their way through this.

The UK, sadly, is now a Chav benefit grabbing haven for pond life .... yes, I blame Labour in the main for this - but, I would like to see the Tories clamping down far more on claimants.

We are entering a new order, Monday will be a Black Monday for the Stock Markets ... August is the mad month in any case ...... this could be really tricky.

pslewis

No, that is not the case ..... those with savings need to do something before they are wiped out. The guarantees in place for deposits will not be worth anything when the economic dynamics collapses.

Seriously, I would rather be someone with a massive debt - than be sat wondering what the hell to do with a substantial sum of cash!!

GlesgaKiss

China blasts US 'debt addiction' and calls for new global stable reserve currency

Article here - http://www.telegraph.co.uk/news/worl...-currency.html

J4CKO

iTrader: (1)

Chinese are bitching now, they knew what the situation was and how much dent they were in and lent them it anyway in the name of profit, sound familiar ?

ALi-B

iTrader: (1)

In defence of the Spainsh; I think their workmanship quality 'can' be to very high standard. I know our Spanish built Seat Altea is better screwed together than my Golf (German built). Even though they based on the identical chassis and suspension. Which car had all the rattles and squeeks? The Golf!

The area I'm familiar with in Spain specialises in injection moulded plastics and extrusions. This ranges from toys, to pipes and fittings amongst other stuff. Now I've used the local made stuff for the plumbing and guttering (Crearplast) and found it far far far better in quality to that available in the UK. Such as the likes of Marley guttering, the same with their rigid plastic waste pipe...Spainsh stuff is a good few mm thick and is UV resiliant, UK stuff is wafer thin and goes brittle in the sunlight. The same can be said for the quality found in ceramics for tiiling and bathroom suites (excluding the generic Roca stuff ).

The question is, where does the UK stuff come from...Uk or China? I know the stuff I've used in Spain is made 15mins down the road. Can't say that for what I buy in the UK, sadly.

As for the builders; different story. 'Typical' Spainish builders usually consist of a Fat cigar smoking foreman who spends more time in the bar drinking the brandy, and a work force of clueless Moroccan or Romanian immigrants who are left to their own devices. Which kinds of ruins it when you have top quality locally made materials to build a house with, but workers who have no idea of what they are doing. Hence why most Spanish ex-pat resorts look lovely whne they are built, then fall apart several years later - as seen on ITV's 'Homes from Hell' .

paulr

Yes, i do think minimum wages and regulations are a good thing, it helps maintain a decent standard of living. Yes they have a cost, but also a benefit.

The impression that China is great at everything, total myth. As is the fact the Chinese are happy with their lot. Read about the recent rail crash were 40 died and 191 were injured. Contrast to Japan where in 47 years of the bullet train, only one fatality.

paulr

But they will, its human nature.

GlesgaKiss

People can maintain a decent standard of living on their own. The fact is that standards of living would be higher if time and money wasn't wasted left, right and centre. In other words, it's a myth that governments make us materially better off. Where's the benefit? You get out what you pay in... or much less in reality. They should be there to provide a legal framework, nothing more.

All I'm talking about here is economic growth. Whether they're all loving life is not really what this thread is about. As I said, can't have your cake and eat it. Growth in the west is not difficult to achieve, it's technically very easy; the politics is what is holding it back.

Western welfare states are currently operating off the back of industrial revolution era wages in places like China. There's irony there somewhere.

jonc

I think China has been particularly astute. China have invested heavily in to the US and owns $724bn US Treasury Securities and that the US needs China to continue finance the US federal budget deficit. Their investment provided the US huge amount of capital and liquidity into US credit markets. This puts China in a position of power and could now perhaps influence or even dictate US foreign policy and with the US credit downgrade, China will now begin to exert some leverage over the US with China being in a much better negotiating position. They will take over the US to become the next greatest superpower.