US RATING AGENCIES: A FORMIDABLE WEAPON OF MASS DESTRUCTION
The debt is like a crazy aunt we keep down in the basement. All the neighbors know she´s there, but nobody wants to talk about her.
~ H. Ross Perot
Dear Mountaineers,
This week, European policy makers unveiled an unprecedented loan package and a program of bond purchases as they spear-headed a global drive to stop the sovereign-debt crisis that had threatened to shatter confidence in the euro. Jolted into action by last week´s slide in the euro and the soaring bond yields in Portugal and Spain, the 16 Euro nations agreed to offer financial assistance worth as much as 750 billion euros (US$ 962 billion).
The European Central Bank now appears officially and irrevocably devoted to counter ‘severe tensions in certain markets´ by purchasing government and private debt. This is where the borders between socialism and communism become extremely blurry. This package was created on the backs of taxpayers, on the basis of more debt, more deficits, more "easy money" and a lot more big brother.
Clearly, these measures will not solve the actual problems. These measures are not about solving problems, but merely about buying time. Admittedly, this ‘grand plan´ has provided for a nice lift in global financial markets after one of the worst single-day corrections in global stock markets last week. However, these measures provide no sustainable improvement.
Furthermore, it has become very apparent and visible for all to see -- if they only looked hard enough -- that the current state of relief is in the hands of American rating agencies. I promised to comment on this aspect of the current Greek debt crisis in last week´s Update. And so I will.
First of all, keep your eyes on the pea!!
More here-
http://www.bfi-capital.com/mountainvision/newsletter.php?view=093f65e080