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Another U.S. Credit Downgrade
by Craig Hemke Sprott Money
Over the past few years, the once-impeccable credit rating of U.S. sovereign debt has been downgraded by several prominent ratings agencies. Only Moody’s stood firm against economic reality and maintained their U.S. credit rating at AAA. However, as of late last week, even this firm has been forced to succumb to the reality of life at the end of The Great Keynesian Experiment.
We must first acknowledge what a long, slow, and arduous process this is. The ratings agency Standard and Poor’s (S&P) first downgraded U.S. debt all the way back in 2011. That seems like an eternity ago! At the time, it seemed like the other ratings agencies would quickly fall in line and follow S&P’s lead. Nope. It took twelve years for Fitch to make a similar move. Twelve years! Now finally the third agency, called Moody’s, made a move last Friday. They didn’t cut their U.S. rating just yet. Instead, they simply placed the U.S. on watch for a possible downgrade. Seriously. You can’t make this up. Twelve years after S&P cut the U.S. to AA+, Moody’s is just now getting around to considering a possible ratings cut in the future.