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Can we be real here? If they were to downgrade the U.S. credit rating they'd be shooting themselves in the foot. Because the dollar would plummet and the doll
by TomOfTTB 16y ago
Can we be real here?
If they were to downgrade the U.S. credit rating they'd be shooting themselves in the foot. Because the dollar would plummet and the dollar is still the world's reserve currency.
And as the article itself says...
"One of the reasons why the U.S. dollar is still the reserve currency is the lack of other options, and in two years there may still be no other options," said Tom Simons, a money market economist at Jefferies & Co. in New York.
The only real competitors are the euro (Europe has bigger problems than the U.S. does) and the Yuan (I'm sorry but most countries aren't going to trust China as the keeper of the default currency).
So what is S&P really up to?
They're trying to influence policy. S&P released the same warning in regards to the UK and the result was a flurry of austerity programs. Clearly they're hoping for the same result here.
I don't disagree with that goal by the way. I'm just saying call a spade a spade. This is a naked attempt to influence policy