What Will The Standard and Poor’s bond rating affect?

19 04 2011

Standard and Poor's outlook for US downgradedThe news from The Standard and Poor’s site is, “On April 18, 2011, Standard & Poor’s Ratings Services revised its outlook on its ‘AAA’ long-term sovereign credit rating on the government of the United States of America to negative.”

These are some of the items at stake in the USA: home values and the ability to buy and sell, credit card interest rates, business loans, pension or 401k values, checking or savings account values, life insurance long term values, annuities, college savings …. and so on and so on.

Ok, here’s the big news.  The Obama Administration and the folks in Congress are not stupid (well, most of them).  They are just political cowards or are intent on destroying the United States fundamental economy.  President Obama has said he wanted to fundamentally change the USA and is doing an effective job.

If anyone in Congress says what needs to be said, they are attacked as executioners of senior citizens and pre-school children.  Everyone wants the other guys golden egg.

On my previous post in 2009, I noted that the famous Julian Robertson’s words in 2008 that inflation could hit 15-20%.  Things have not improved since then and have gotten worse.

Depending on who’s doing the math, the US spent more than $400 billion in interest on the approximately $13 Trillion debt in 2010.  The  deficit spending was and still is out of control.  The interest rates paid are at historic lows.  The average interest rate paid on the debt was around 3%.  Most of that debt is short term treasury bills and those historic rates will not last.

Here is what will most likely happen. If the bond rating of US treasuries are downgraded by  Standard and Poor’s 6 months to 2 years from now, interest rates on new Treasury bills or bonds will skyrocket to around 8-12% within 3 months, no matter what Moody’s says.  The overnight bank to bank interest rate will skyrocket.  Rates on loans to businesses will shoot through the roof.  Loans to home purchasers will go sky high causing real estate prices to crash.  The ability of people to move or transfer will be severely hampered.  Those who are upside down on their homes will default and foreclosures will rise again.  The speed of all financial transactions will slow down as will economic growth.  Unemployment rates will go up and either hyper inflation or deflation will kick in full gear.  We could have another round of deflay-inflation, where real estate crashes and commodities prices inflate.

The ability of the USA to pay it’s bond obligations will not be able to be met.  Over a 4 year period the interest on the national debt will average 6-8%, depending on how high the downgrade interest rate on new bonds will be.

By that time, the national debt will be $20 Trillion at least.  But lets say for whatever reason, that the deficit gets reigned by January 2012  and caps out at $16 Trillion (very unlikely before a new election cycle).  If the average interest rate on the debt is 6% instead of 3% in 2010, the interest payment on the debt would be just $40 billion shy of $1 Trillion dollars per year.

Current folks in power are talking of slowing the growth of the debt over 10 years.  Six months to 2 years doesn’t allow for that luxury.  The solution is to radically cut or eliminate spending on all welfare programs including Medicaid/Medicare and Social Security.  The nation is not taking this seriously

Hang on for a wild ride because we are sitting on a time bomb.  The golden goose egg has been replaced with a rotten one about to explode.


We Only Have A Few Seconds To Live

8 04 2011
We Only Have A Few Seconds To Live

We Only Have A Few Seconds To Live

We only have a few seconds to live!

We really, truly, only live a few seconds every day.  In the presence or our present we consciously deal with what is in front of us, anticipate the next moment of life, and subconsciously process and react to what just occurred.  The change is constant.

Thoughts trigger emotions which ripple through our bodies.  Our bodies generate actions and reactions.

Scientists and philosophers contemplate and test how much control individuals truly have over their destiny.  Do we have choice or free will?  Are we producers or simply products?  Are we creators or creation?  Do we matter or are we simply of matter? Are we genetic soup or master chefs?  Is our inner intelligence intelligent or is it meaningless mental echo sloshing around in the tides of environment?

The answer is….yes.  Is the riddle solved?  It is within each individual.  Our ability is to be the master or the slave, the victim or the victor, the action or reaction, the live or the living dead.  Our future is determined by the accumulation of our collective now moments.  To Be or Not To Be.  I am not.  Perhaps I am.  I am.  The past, present and future melt into one as we chose to live.

Whenever we make the choice to capture the moment and make a choice instead of reacting out of environmental conditions or habit, we influence ourselves drastically.  When captured enough, an explosion of permanence takes hold.  Consistent choice cements character.

There are those in science and academia who state as revival gospel truth that we are victims of our ancestors and can’t do a thing about it.  On the contrary, some experimenters have discovered and are uncovering details that what we think and do affects our DNA directly and indirectly.

A young poet, William Earnest Henley in 1875 wrote his famous words titled Invictus. He penned this short poem in his hospital bed after having his leg amputated.

Out of the night that covers me,
Black as the pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.

In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed.

Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds and shall find me unafraid.

It matters not how strait the gate,
How charged with punishments the scroll,
I am the master of my fate:
I am the captain of my soul.

Am I the Captain?  I am!

Teachers Unions Are Dumbing Down America

5 04 2011
Education In America

Which Way From Here?

As currently structured, the Teachers Unions should be banned from America.

I don’t like being upset.  I don’t like yelling at people but I feel like yelling right now.

There is no collective public good coming from these unions unless you think a fat, lazy and stupid American public is good.

I just watched the documentary, “Waiting For Superman.”

You must watch it and get mad enough to demand the Teacher Unions be reformed or banished for all time from a freedom loving society.  Have everyone you know watch the movie and get busy!

In a nutshell, we are being robbed by the teachers unions of America – the National Education Association (NEA) and the American Federation of Teachers (AFT).  They promote tenure which has no business in a productive society.  My father was a teacher and a member of the NEA and discouraged me from becoming a teacher with the current state of teaching in America.  Bad teachers cannot be fired after they get tenure.  Watch the movie and you’ll see

This movie shows very clearly that the teachers unions are the most powerful political force in America.  The are responsible for the dumbing down of America and its possible demise.

The Superman in the documentary is KIPP! – Knowledge Is Power Program – Charter Schools.  They are only serving 27,000 students currently.  The number needs to be 55 million.

If you want America to succeed, get every child you can to get into this Program to privately destroy the evil, greedy, lazy, unproductive, selfish lock the teachers unions have over our parents and children.

If you are a true philanthropist, donate to these schools, generate scholarship programs, fight to allow these charter schools to compete openly and honestly for our America’s educational funds.

The KIPP movement was established in 1994 and has been getting phenomenal results.  The teachers unions are threatened and are pushing KIPP and other effective programs around and sadly making inroads into what must become a national emergency priority.

Bill Gates is  in the documentary and says that if something isn’t done quickly, the USA will be lost.

Here is the movie trailer:

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