Sen. John Kerry (D-Mass.), among other prominent Democrats, blamed the Tea Party for S&P’s downgrade of the U.S. government's long-held AAA credit rating. In the aftermath of this historic U.S. fiscal shift, which arrived despite the $2.5 trillion deficit reduction plan passed last week, the congressional blame game is an inevitable outcome, and Sunday shaped the springboard for Congress to indulge the media in partisan pandering.
"This is the Tea Party downgrade because a minority of people in the House of Representatives countered even the will of many Republicans in the United States Senate who were prepared to do a bigger deal," Sen. Kerry said Sunday on NBC’s Meet the Press, referencing the Senate’s bipartisan "Gang of Six" plan, which compromised spending cuts for tax increases.
Responding to Kerry’s accusation, John McCain (R-Ariz.) — who recently called House Republicans "hobbits" for their thwarted balanced budget amendment — defended Tea Party Republicans, while congratulating them for keeping their 2008 campaign promises.
With gold bouncing up from $1,668 an ounce on Friday, August 5 to $1,778 on Tuesday, August 9, it was the biggest three-day rally since the start of the great recession in 2008. At the same time, the equities markets were falling precipitously, losing over 600 points on the Dow on Monday alone. What is the connection?
The easy answer is fear, loss of confidence, and uncertainty. A credit rating agency has taken away the United States' top-tier AAA rating on its bonds, the spreading debt crisis in the Eurozone has now reached Italy and Spain, and the assumptions tying the financial system together are beginning to be questioned. In its report entitled “On the Coming Gold War,” Redburn Partners says a “rising gold price is a warning signal: it casts doubt on the US economy…. Gold is the only asset to outperform in periods of either uncontrollable inflation or deflation: the US economy is on the knife-edge between the two … gold is a vital barometer.”
With Texas Governor Rick Perry expected to make an "announcement" on Saturday at a conservative conference in South Carolina, scrutiny of his record is more important than ever — particularly a look at his record with regard to China. In spite of posturing as an independent Christian conservative, Perry has consistently contributed to what is called the Chinafication of America.
In a video produced by Vince Wade, Wade points out that Perry “preaches less government, less taxes, and other conservative cliches,” but his record says otherwise.
Michele Bachmann is hoping to become the first presidential candidate to go directly from the House of Representatives to the White House since James Garfield made the leap in 1880. But a rapid climb up the political ladder is nothing new for the third-term Congresswoman who has gone from defeated school-board candidate in Stillwater, Minnesota, to top-tier presidential candidate in a mere 12 years. Along the way she has become a favorite with the Tea Party movement and is founder of the congressional Tea Party Caucus. A Des Moines Register poll at the end of June showed her in a virtual tie with early frontrunner Mitt Romney in Iowa, where caucus voters will provide the first test for presidential contenders in 2012. She has been among the most visible and vocal opponents of both the Troubled Asset Relief Program (the Wall Street bailout) that Congress passed in 2008 and the following year’s rescue of the auto industry that left the federal government the principal shareholder of General Motors. She has introduced legislation to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act, described by the president of the American Bankers Association as a “tsunami of new rules and restrictions for traditional banks that had nothing to do with causing the financial crisis in the first place.” Above all, she seeks the repeal of the healthcare reform bill that Barack Obama and a Democratic Congress enacted last year, the Patient Protection and Affordable Care Act of 2010.
The communist Chinese dictatorship blasted the U.S. government for endangering its massive dollar holdings, calling for America to rein in its out-of-control debt by slashing military spending and welfare. The regime also demanded international supervision of the dollar and even suggested the creation of a new global reserve currency.
The attack came in the form of an editorial from Xinhua News Agency, one of the dictatorship’s official propaganda arms, following the downgrade of American debt last week by Standard & Poor's (S&P). It immediately made headlines around the world.
“China, the largest creditor of the world's sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China's dollar assets,” read the commentary. “To cure its addiction to debts, the United States has to reestablish the common sense principle that one should live within its means.”
Texas woes regarding the Trans Texas Corridor (TTC) may be getting even worse. Ever since the State partnered with Madrid-based Cintra, to build the wildly unpopular mid-continent trade corridor, Texas has had nothing but trouble. Especially property owners who have become victims of eminent domain abuses, and residents subjected to unwanted toll roads, a tyrannical state Department of Transportation and downright bullying by Governor Rick Perry and the State Legislature. But now, according to the Fort Worth Star Telegram, Texas officials are worried about a possible default by Cintra that could affect the progress of the Texas corridor projects. Cintra is involved in road construction projects all over the world, including the operation of the Indiana Toll Road. After the company was also awarded the contract to operate the Trans Texas Corridor for the next 50 years, Texans learned they were stuck with both Cintra and a huge corridor project they did not want. One feature of the Texas contract was that Cintra was guaranteed a buyback if the project proved unprofitable. It seems that very thing could happen with the company’s operation of the Indiana Road. Because of lower traffic, therefore lower toll revenue than originally forecast, Cintra has used up most of its rainy day fund and is running out of money to pay its debt to Indiana. The revenue shortfall occurred after Cintra dramatically increased tolls on the Indiana road.
If a country wishes to save its taxpayers some money, it should enact stiff immigration laws. That’s the conclusion of a report from the Danish Integration Ministry, according to Spiegel Online.
Denmark has imposed tough measures to stem the flow of Third World immigrants, and those stricter laws have saved the taxpayers about $10 billion during the past decade. The country now boasts the strictest controls in the European Union. Though the Eurocrat left has voiced opposition to the tighter controls, conservatives believe that Denmark is in better shape than most countries that have been overrun by immigrants, many of whom join the welfare rolls and commit crimes.
Finger pointing is the answer to U.S. credit downgrade and economic woes; inflation is a form of default.
George Soros, the hedge fund investor who called gold "the ultimate bubble," has divested his portfolio of nearly its entire investment in the precious metal, inciting many to fear that the price will very soon plummet, devaluing the specie-heavy portfolios of millions of investors.
Like it or not, like him or not, attention must be paid to his movements. It can be very expensive to ignore the predictions of Soros. For example, on September 16, 1992 (a date subsequently known as “Black Wednesday”), one of the investment funds of Soros sold short more than $10 billion worth of pounds sterling, profiting from the British government's reluctance to adjust its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries.
In a series of expected additional press releases, the Standard & Poor’s credit rating agency is expanding its downgrade of debt securities tied to the now-lower-rated sovereign debt of the United States, including Israeli bonds, Fannie Mae and Freddie Mac, and “pre-funded” municipal bonds. Other credits tied closely to U.S. sovereign debt are also expected to be downgraded shortly, with only a few exceptions.
Most municipal bond issues are not pre-funded with U.S. Treasury securities, and so they aren’t likely to be affected, especially as they rely on local and regional sources of revenues, with little reliance on the federal government to back them up. And, at the moment at least, S&P continues to rate 13 states as AAA.
These downgrades have set off a firestorm of protest, mostly from the White House and the Treasury Department. Secretary Timothy Geithner angrily expressed his views to NBC/CNBC News: