Discrediting The Alternative:
The cushion to US Treasury debt provided by the Fed’s policy of “quantitative easing” (buying Treasury
debt directly) was reported to have ended in October 2009. By early December 2009, the “alternatives”
to US Dollars and Treasury debt paper were getting very uncomfortably strong. Gold had once again
broken above the $US 1000 level in late September and moved above $US 1200 at the start of December.
At the same time, the Euro had risen to top the $US 1.50 level. The danger was acute. Something had to
be done. Enter the US “ratings agencies” - Fitch, Moody’s and Standard & Poor’s - those same ratings
agencies which blithely ignored EVERY signpost to the GFC.
With the downgrading of the sovereign debt of Greece in early December 2009, the spectre of a
“sovereign debt crisis” was raised. As you know, that spectre has quickly become the number one global
financial issue of 2010. As longer-term Privateer subscribers also know, this newsletter raised the issue
of “third stage debt deflation” - a situation in which the debt issued by governments as the underpinnings
to its currency comes into question - nearly two years ago.
The sovereign debt risk issue was always going to emerge eventually. But to deliberately provoke it as
the US did at the end of last year was not only incredibly risky but a telling measure of the true magnitude
of the fiscal and financial state of the nation which still underpins the global financial system with its debt
paper and its currency. Having started, though, there was no going back. Over the year to date, every
time that the Europeans seemed to be “getting on top” of the Greek debt debacle, there was another
lowering and/or negative outlook by the ratings agencies. April was no exception. On April 9, Fitch cut
its Greek rating to their lowest “investment grade”. On April 22, Moody’s cut Greece to an A2 rating,
four steps above junk. Then came the last week of April and the record US Treasury auctions.
April 27 - Upping The Ante:
On April 27, as the US Treasury was preparing to sell $US 44 Billion in two-year paper, the third US
ratings agency, Standard & Poor’s, was heard from. They cut their Greek sovereign debt rating all the
way to “junk” status and followed that up by lowering the rating on Portugal by two steps. The yield on
two-year Greek paper spiked as high as NINETEEN PERCENT on the day! Global stock markets
swooned. Global commodity prices, with one notable exception - GOLD - plunged in $US terms. The
US Dollar itself soared, especially against the Euro. And sure enough, US Treasury yields plummeted
with the two-year yield dropping back below the 1.00 percent level. Once again, it had “worked”.
Er ist fest davon überzeugt, dass die USA diese Krise "erzeugt" haben, um vom Dollar und den Treasuries abzulenken. Und zwar über die US-basierten Rating-Agenturen, denen die Finanzmärkte immer noch glauben. Dirk Müller hat gestern bei seinem Vortrag am Kongress der unabhängigen Medien auch darauf eingeschlagen und diese Agenturen als eine der mächtigsten Waffen des US-Imperiums bezeichnet.Es war aber klar, dass GR einmal "drankommen" musste, denn die Verschuldung dort war einfach untragbar, genauso untragbar wie in vielen anderen Staaten wie den USA - die interessanterweise immer noch ein AAA-Rating haben. Wenn diese Downgrades gezielt waren, warum ist Europa dann nicht in der Lage, zurückzuschlagen? etwa mit einem Abzug aller europäischen Truppen aus Afghanistan oder dem Abstossen der Dollars? Dafür macht ein ein solches "Rettungspaket", das bei den eigenen Wählern kaum durchgebracht werden kann. Wirklich ein Haufen ängstlicher Hühner.
