O.T. Moody’s Investor Service, might cut the US credit rating

From yesterday:-

Markets Conclude the U.S. Is Riskier Than China Now the Treasury has to pay a premium over Chinese bonds to attract investors. They see four major red flags in U.S. debt.

Best Regards,

--Spehro Pefhany

Predictions about financial causalities are historically not better than noise.

The theory was that a business tax cut would cause a short-term increase in the defecit but a longer-term improvement in productivity. That's probably right.

Two problems that the US has now is government spending and the labor shortage.

Sure looks like potential financial crisies in the cities and states (pensions), the US (defecits) and Europe and China (various instabilities.) The whole world economy is fragile and not well understood.

Energy is fundamental, and we have lots of it. So does Russia.

--

John Larkin         Highland Technology, Inc 
picosecond timing   precision measurement  

jlarkin att highlandtechnology dott com 
http://www.highlandtechnology.com

I remember when Japan was going to crush the US financially, to own the semiconductor market.

The future is hard to predict.

--

John Larkin         Highland Technology, Inc 
picosecond timing   precision measurement  

jlarkin att highlandtechnology dott com 
http://www.highlandtechnology.com

Of course the debt has no relation to the fact that the US has been waging morally indefensible, geopolitically counterproductive, and financially ruinous overseas wars for the last 20-odd years. :(

Of course that's been one of the few bipartisan policy 'successes' of the period.

Cheers

Phil Hobbs

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It depends a bit on the causes. Some antics are more obviously stupid than others.

It didn't work for Reagan or Thatcher, except in the sense of sucking in su pport from businesses who were more interested in the short-term boost to t heir profit than the long term health of the economy.

You've got to be as ignorant a John Larkin to imagine that this time it mig ht produce enough of a long term improvement in productivity to compensate for the immediate increase in the deficit.

As was expected when the tax cut was announced.

Certainly not well understood by Trump who still thinks that a trade war wi th China works to the advantage of the US, even as it cuts back world trade (which is why the whole world economy looks fragile at the moment).

Energy represents 8% of the US economy. It may be fundamental, but so is fo od, which only represents 5.5% of the US economy.

The economy is complicated, and there are a lot of different ways of wrecki ng it. Letting somebody like Trump fiddle with it - when he is only really interested in the impression he is creating, and couldn't care less about l ong term consequences (or can't be bothered finding out what they might be, which comes to the same thing) - is extremely risky, and spectacularly unw ise.

--
Bill Sloman, Sydney

John Larkin wrote

A high risk is US sanctions on Iran, that forces the EU and other world powers to look for a different exchange medium than the US dollar and banks. EU is working on that now. If world trade is done in Chinese currency or Euros, then it is all over for the US, leaving war as its only option. A war they will lose as everybody and their cat now has their nukes pointed at it.

I think this is trumps plan, have the US destroyed by others, draft everybody to rebuild it and work for free. However there will be few if anybody left to rebuild it as the 'merricans will flee in boats and bathtubs across the Pacific and Atlantic to Europe where they will ask for asylum. As Merkel steps down in Germany asylum will be difficult to obtain. China does not want them either, and Japan the least of all I'd say. :-) Some who make it in their bathtub to Down Under will be put put on some island on the coast near the old nuclear testing site... So those who try to flee towards Mexico will be stuck in the wall and other barriers. Some who flee toward Canada will be met with great suspicion, if lucky they make it walking through the cold to Russia, where they will be put to work cleaning up the radiation. Glowballworming will have caused seawater to rise by several meters causing the UK to disappear beneath well Britannica rules the waves or the waves rule Britannica, oh well, those will flee to Europe mainland too.

An ice age will follow and human population will decrease significantly and in the long term the sun will expand melt the ice and everybody on the planet and now the only change is bathtubs into space, or a few may make colonies on other planets, will adapt after many generation to a different atmosphere or the species will simply go extinct if it does not get itself together. All trumps fault. Maybe SpaceX will save the species.

Do I need more or less of this coffee?

Money is freely convertable and is fungible. Dollars are convenient but it doesn't matter much. Why would anybody start a war over basically exchange rates?

The US is now an oil and gas exporter, which makes Iran an econonmic rival. But Russia is an oil and gas exporter too. So is Canada. Let's declare war on Canada; it's conveniently close.

Actually, we should declare war on Venezuela; they really need it.

Gold plated bathtubs.

Interesting scenario. Musk as emperor. St Elon.

More. I'm slamming down a cup of very strong Peets right now.

Civilization really began when coffee, tea, sugar, and chocolate were imported into Europe in quantity.

--

John Larkin         Highland Technology, Inc 

lunatic fringe electronics

The US got stuck Saving The World from Germany, Japan, and the USSR and China. We have become the world cop. It would be nice if we could enforce world peace and prosperity, but a lot of the world won't have it. Primitive passions still dominate.

The idea of spreading democracy sometimes works, but too often not. Europe, Japan, South Korea, Hawaii, Alaska turned out OK, but they were already pretty organized.

What was our moral obligation, if any, to defend the people of Britain or Belguim or Poland or Kuwait or Korea or Viet Nam or Rwanda or Yemen? That's a tough one.

--

John Larkin         Highland Technology, Inc 

lunatic fringe electronics

Stop whining...

When the British Empire was top dog, it had the role of the enforcing the peace sufficiently that trade could occur. In fact, if you look at the history of the Royal Navy, some people can make the argument that becoming the world cop enabled the British Empire.

In WW2 the US financially broke the UK, because the US wanted to be top dog. As the top dog, the US took over from the UK being the worlds cop. *It goes with the territory.*

Now China is exerting its muscle, and is becoming a very significant naval power with a reach all the way to Africa (Hint: see where it is establishing naval bases).

I'm sure China will be happy to become top dog /again/. They regard the past few centuries as a humiliating aberration. They will happily take over from the US>

Hence be careful what you wish for: you might get it.

What I personally wish for is for everybody to live in peace and relative prosperity on their own. The US let Europe, Japan, South Korea and the Phillipines mostly go their own way when they finally got settled down; I don't think the US wants to be the world cop or "top dog." The role was forced on us. The US was publicly and politically isolationalist before both world wars.

We should pull our troops out of europe and Japan and let them pay for their owned damned defense. They are probably safe on their own now, finally got a millenium of war and empire out of their systems.

The British Empire was substantially about economic exploitation and class/racial superiority and propagating Christianity. Slavery, opium wars, India, Ireland, all that ugly stuff. It did some good in some places sort of by accident. Most of history is sort of by accident.

--

John Larkin         Highland Technology, Inc 

lunatic fringe electronics

Well, yes, doesn't 99.9% of people? Let's all sit around a campfire and sing kum-ba-yah.

It wanted to. Whether it wants to is a different question.

You don't understand why the US was in Europe. It was so that a nuclear ground war against the godless commies would be fought in Europe, not the US.

At the time, much of that was defined to be good, and in some ways it was.

Much of that can also be said about the current US hegemony. While history doesn't repeat, it does rhyme.

John Larkin wrote

It is not that, it is the power. Much of US bullying is about sanctions, grabbing money from people, forcing governments or leaders out of power. That is also what they do in Venezuela, trying a regime change at all cost (to the locals). US tries it with sanctions on Russia, threatenes EU with sanctions if we buy Russian gas and not US inferior crap gas, An other very important factor is supporting Saudi Arabia, however evil the current leaders may be, because those recognize israel. A look at he stock markets since trump came in power, well look:

shows that only Israel, Saudi Arabia and Brazil are in the positive. Brazil is an ultra-right leader who just today got accused of corruption while he claimed to be fighting it in his election campaign. What's new. Policing the world, do not make me laugh, well OK if you compare it to some of the US police, then yes, Holding countries at gun point (for example to buy crappy US weapons) is a better way to describe it. For sure it is a human aspect, and the leaders have less ethics than the normal people. Creating a common enemy to distract attention away from internal problems is nothing new either, now Russia has 'dunnit. Oil price now is too low for countries like Russia to feel good by, 70 would be better. It hurts Venezuela too, but that country is pestered in so many other ways by the US. So trump is a puppet of israel.. The world has changed and is changing, Rome fell ... 'And Carthage must be destroyed' did not help it a bit in the end. Nobody has fear anymore for US weapons, any decent engineer can make those, make underwater vessels to deliver those to US harbors. Who needs long range bombers if you can do it for a couple of thousand Euro? israel will fall, it is too small, 3 nukes or less for ever takes it out, and nothing you can do. The only solution would be if it actually accepted peace, and treated others in a better way (Palestinians comes to mind) but in the one ant heap against the other that scenario will never happen. What will happen is that the nukes will fly.

It is, likely, all part of evolution, but evolution made the dinos, and evolution got rid of those. Without control of world finances the US dollar will lose all its value, it is is called inflation. In one way that makes exports cheaper, but then you need something of value that others want to buy. that bit of low quality oil won't do.

Technology will come from China. Today Apple surrendered and in the fight Qualcom versus Apple where China just introduced a sales stop for Apple, Apple degraded their own system to comply with Chinese regulations.. so not as to violate the Qualcom patents (Chinese court view is they do). All your money and all your influence is nill. EU an China just strengthened the Belt and Road idea, many countries in South America and even Africa are on board in that too, in fact almost ALL the world except US. Take a real globe, and look at the small spot N America is compared to the rest. get some sense of reality. So if things continue the way they go now the best thing the US can hope for is to become a third world low wages assembly place for the rest of the world.

Super inflation will inflate some of its debt away perhaps... China and Japan hold much of US debt, so from some perspective own it, and in some way that still prevents them for letting it super-inflate. But a clueless 'precedent' will ruin it anyways, Nobody trusts US anymore after it withdrew for international agreements and organizations, and trust is what makes world trade happen.

It is over. face it, Rome fell, Italy's budget was recently rejected by the EU, they had to change it to show a lower deficit, it is a minor player now, so is the US.

Any attempt to gain back control by making war will fail now, you have no allies, only 'friends' hold at gunpoint.

I was just reading a fun story about an ape in a cage, hard to translate from Dutch, being made upset by a beautiful women, all the ape could do in the end was jump against the bars of its cage. You are building your own bars in the south for example, and metafisical speaking everywhere else.

Fort knox is empty

OK I made an other big can, Brazilian beans grinded by me myself.

For the US is was Enrico Fermi who was imported after he figured out what makes the sun shine.

A lot of history was driven by stupid wars over power and national pride and the ambitions of a few people. And military establishments who wanted to do their thing, fight.

I think the USA is ahead of the curve on backing away from the nationalism/power thing, as the West was ahead of the curve on religious freedom. The big chip-on-shoulder power-seekers are now China and Iran and Russia.

The USA, as a young nation of immigrants, doesn't have the nationalistic and racial pride of many other places.

There are places in the world where people are still angry about wars that happened a thousand years ago. The suni-shiite hatred is crazy.

Venezuela really needs a regime change. Idiot socialists think they can run an economy, and can't.

They should do the "Mouse that Roared" thing and declare war on the USA.

Isn't methane mostly methane? Do you like Putin being able to put you in the cold and dark?

--

John Larkin         Highland Technology, Inc 
picosecond timing   precision measurement  

jlarkin att highlandtechnology dott com 
http://www.highlandtechnology.com

John Larkin

US will self destruct, why bother.

Rome was takes by the Barbarians.

Neither Nero playing the fiddle in Rome nor trump playing twitter in what's-it-tone can stop these empires falling. :-)

I trust Putin more than trump.

trump will put anyone in the dark if he feels he can force a 'better deal' no matter what the contract was. Like I said, no trade without trust.

I don't suppose you guys would consider cutting spending as a way to reduce that debt?

A high risk is Russian forces in the Middle East for the first time ever.

They deployed those forces the day after Obama's Iran deal was finalized.

I don't suppose you perceived any risk in that.

Several conservative columnists predicted the 2008 crisis starting when Clinton expanded Freddie and Fannie's authority and they sounded the alarm louder as it got closer. Then there were articles from liberal economists, who never predicted it, claiming that those conservatives don't understand what caused it.

So, you could say that the left's predictions are no better than noise. I think they're worse. I mean those are the people who said in 1981 that we had to accept the USSR would last a long time and in 1989 that they knew all along it would collapse.

Obvious, but not to people who don't perceive reality.

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Like Donald Trump, you ignore the fact that relative prosperity depends on a lot of international trade. Less trade makes everybody poorer, which is e xactly what Trump's enthusiasm for trade wars has recently engineered.

It was a stupid attitude, but eventually even US politicians got the idea t hat a German or Soviet dominated world wouldn't be in the best interests of the US.

They do. The US does spend more on defense than anybody else - for while it did spend more than everybody else put together, but now it only spends mo re than the next seven countries down the pecking order combined.

A lot of that spending seems to be welfare for big defense companies rather than expenditures that are likely to make the US more secure.

Mary Kaldor nailed it back in 1981

Nothing much has changed since then. Wars have become more low-tech, and we apons systems even more elaborate, expensive and irrelevant.

The European Union isn't going to fight any more wars between member states - now that former Yugoslavia and former Czechoslovakia are now separate st ates within the federation - but Russia shows signs of wanting to become gr eat again, and some of countries to the south-east have fairly demented pol itical leaders.

The British Empire was entirely about economic exploitation. Christianity a nd racial superiority were convenient excuses.

The US, with it's history of banana republics, looks very similar.

--
Bill Sloman, Sydney

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investors. They see four major red flags in U.S. debt.

d powers to look for a different exchange medium than the US dollar and ban ks.

er for the US, leaving war as its only option.

"War is the continuation of politics by other means." Money always was impo rtant, and seems to be pretty much all-important now. Some political leader s do seem to be very short-sighted in their calculations of financial inter est.

The USA is even more interested in money than everybody else - it's part of the "people who own the country ought to run the country" ethos.

China wants reliable food supplies in a world where anthropogenic global wa rming is making its own rather marginal food producing capacity even more m arginal.

Iran wants security. It had one CIA-inspired coup back 1953

and had a lot of grief getting rid of the regime the CIA installed. What is has now is better than what it had, if not all tha great.

Russia is being run by a bunch of money-grubbing crooks. They aren't going to start a war, which would cost a lot of money, but they are stupid and gr eedy.

But individual Americans seem to get indoctrinated with the idea that the U S constitution represents a high high point in political operating systems, rather than a primitive (and rather aberrant) way-station in their evoluti on.

But local power structures exploit it, and see a short term advantage - for them - in keeping it going.

st (to the locals).

Venezuela is a failed state. The people who have ended up in charge haven't got a clue how to run an economy, and think that calling what they are doi ng "socialist" makes it look better. It doesn't make it look remotely socia list, but John Larkin can't even tell the difference between socialism and communism, so he isn't going to notice.

That was a comedy.

buy Russian gas and not US inferior crap gas,

Methane is methane wherever it comes from. Shipping it from Russian through a pipeline is cheaper than liquifying it and shipping it in liquid gas tan kers across the Atlantic.

Having Trump able to put Europe in the cold and dark would seem to be just a bad as giving Putin that power. Iran has lots of natural gas too.

Putin is a lot more dependent on his hydrocarbon exports than the US is, so he's less likely to cut them off at a whim. He's also a trifle more ration al than Trump (which isn't saying much).

--
Bill Sloman, Sydney