Moody's Threat of US Downgrade!

Story this afternoon of the FEDs contingency planning for a default on August 2nd. looking more and more like that's where we are headed.

http://news.yahoo.com/exclusive-fed-planning-potential-default-194422709.html

PHILADELPHIA (Reuters) - The Federal Reserve is actively preparing for the possibility that the United States could default as a deadline for raising the government's $14.3 trillion borrowing limit looms, a top Fed policymaker said on Wednesday.

Charles Plosser, president of the Philadelphia Federal Reserve Bank, said the U.S. central bank has for the past few months been working closely with Treasury, ironing out what to do if the world's biggest economy runs out of cash on August 2.

"We are in contingency planning mode," Plosser told Reuters in an interview at the regional central bank's headquarters in Philadelphia. "We are all engaged. ... It's a very active process."
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Here we go.

Republicans are going to sink the U.S. economy intentionally.
 
Problem is, if I discharge a rifle in my backyard, the whole neighborhood would be after me (I live near Quantico, and near an elementry school). Plus, those deer in my backyard are so skinny and sick-looking I have some doubts about the meat. I think I'll send the sig other out to go catch some fish.

Can't think of any other good reason to invest in ammo, that's why the posting on hunting. (caveat: I have bad eyesight and probably am the wrong person to give a rifle to).
 
Attention citizens who who worked hard and believed an easy life was just around the corner: what you thought you had coming is not there. And to those who already got theirs: yours will soon be worth less.

Please stand by while a new bipartisan way to work you to death is finalized and promoted.

Sorry about your luck.
 
I find out about these things thru TSPTalk. Hubba, hubba. Freak out!

I have exposure to what is playing out for state employees here in Florida, as my wife is a state employee. She's a sensitive person (for one thing, to the stress) and it grieves her to see worse happening to fellow employees than to herself (such as losing their job) while bad enough is happening already for her and who knows what is next. It looks like a similarly stressful environment is in store for federal employees.

This Coburn's proposal does not look good. And then there are the cuts in store for Soc. Sec. COLA's, etc.

It drives me crazy. We have got to squeeze every drop out of this TSP thing that we can.

We have really got to get frugal in our personal lives, folks, if we aren't already. My parents, both of them, could squeeze the red color out of a penny. But they came thru some heavy times. Dad lived thru hard enough times, then the Depression, worked every day of it, but saw his banker friend in the unemployment line when he went there to post a help wanted notice; Mom lived thru hard times, real hard times starting with during the first world war, and on the edge (luckily not in the middle of it) of the Great Hyperinflation in Europe. Lucky for them, nevertheless, that her Dad's parents were farmers; farmers could grow and raise their own food; city dwellers, factory workers, and miners didn't have it so good. Which was why, btw, that Hitler came to power. One reason I bucked for this house in 1992, it's on 3/4 acre.
Yeah, Mother said to me a few times, Geld regiert die Welt, and Not bricht Eisen. Money rules the world; Need breaks iron.
We need to fasten our seatbelts, folks. I think it's going to get interesting. Over time frames of months and years.
There's an interesting article about barter and survival on Minyanville.com about a fellow named Dan Martin out in the desert. Interesting point of view there.
 
SOCIALISM SUCKS!:nuts: I THINK IF WE QUIT PAYING SINGLE MOTHERS FOR not GETTING MARRIED WE COULD AFFORD TO TAKE CARE OF THE REALLY SICK PEOPLE INSTEAD OF CREATING A COUNTRY OF FATHERLESS CHILDREN THAT LIVE ON THE DOLE! The truth will set you free!
 
Chained CPI assumes people will trade down to cheaper food as food prices go up-incomes go down (relatively speaking), but if you're already on the edge, can't trade down much further-from hamburger and hotdogs to beans and rice-that's the ticket. hope everyone is growing a garden or about to start-even if its just a tomato plant in a pot on the patio. I know a retiree who went back to work to help pay major medical bills (broken hip) so wouldn't have to sell their home. didn't make that much to begin with before she retired, neither did her husband.

I wonder how serious coburn is about cutting the sick leave and annual-that functions as shortterm eldercare insurance for us sandwich generation people with aging parents-we'll just end up taking LWOP if we must-or end up doing early retirement in lieu of family leave to handle family issues, maybe that's the expectation. OTH, might have to keep on working much longer-to keep what insurance coverage there is to deal with those issues. My uncle worked til about 70 at a blue-chip manufacturing corp (longer than planned by several years0, while his wife progressively lost more and more of her life to brain tumors over 10 years. Daughter became paid in-home care the last couple years of aunt's life rather than pay someone else. daughter quit paid work elsewhere to care for her mom. I guess if they handled it that way, us feds can do it too, if the option is there in such situations.

improving margins by reducing payroll by any means possible and becoming more efficient with what's left. only gets them so far before the savings growth flattens out-earnings growth in the big companies is likely to start fading for similar reasons pretty soon here. beyond a certain point working harder/smarter/with less, doesn't get you anywhere but tired, frustrated and less effective.
 
Republican Senator Tom Coburn's proposal today:

Coburn proposal outlines a number of cuts affecting the federal workforce:
  • Extend the two-year freeze on civilian employee pay for an additional year and limit performance awards and recruitment, retention and relocation bonuses during this period.
  • Freeze locality pay for five years.
  • Prohibit rehired annuitants from receiving a full salary in addition to pension payments.
  • Prohibit federal workers from carrying over unused sick leave from one year to the next.
  • Allow employees to carry over half of their unused annual leave and cap vacation at 30 days annually.
  • Use the "chained CPI" method, which takes into account changes in purchasing habits as prices change, to calculate cost-of-living adjustments.
  • Cut the government workforce by 15 percent, or 300,000 jobs, over 10 years by hiring two employees for every three who leave federal service.
  • Use attrition to reduce the Defense Department civilian workforce by 5 percent beginning in 2014.
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That's just a tip of the Coburn slash and burn federal employees proposal.

More:
http://www.govexec.com/story_page.cfm?articleid=48285&dcn=todaysnews
 
CNBC.com Article: If US Loses Triple-A Rating, Almost Anything's PossibleWhat happens if the United States, the risk-free benchmark from which all other assets in the global financial market are priced, loses its coveted triple-A rating? Nobody knows for sure.Full Story:http://www.cnbc.com/id/43809671

Sounds like agg or f fund may get downgraded. I guess G fund is as safe as we can get.
 
James48843 said:
Rode on a plane this morning on the same flight with Ohio Republican Congressman ... I asked Mr. Latta ...
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You have an unusual way of making friends. I'm assuming the only reason you were able to ask him was because of your credentials and seating chart?
I looked him straight in the eye, and told him
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I guess you sure told him then
The next time I see him ...
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Not if he sees you first, although you may end up having a nice visit with security
he and his ilk refuse to raise the debt ceiling.
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Did you get a chance to share with him your views on the Teaparty? You weren't wearing berkenstocks and smelling like patchouli were you?

From an objective viewpoint, I'd say you have quite a bit you aren't willing to lose, probably even feel like you've earned it. Guess what, there is a whole cohort of hardworking folks who are tired of seeing the fruits of their labor pee'd away to those with no motivation, and they don't care how we came by what we've got, it's time to share the wealth, by stopping spending, because if we keep borrowing and spending all that everyone has worked for will quickly become worthless. So while your assets still have some value, go see if there's any honey on sale, 'cause that Michigan vinegar bait you using ain't catching many flies.

It's kind of like socialism, except instead of taking from the working public and giving it away for votes, the people are taking theirs back.

Tip: if you're checking account is empty, quit writing checks or they will bounce. I know that sounds like some common-sense-but-esoteric-lesson other people less fortunate than you have to learn before they graduate to responsible adulthood, but it is universal in application. Maybe a stint in summer school will do you some good, but you must do the work, there is no extra credit.
 
James48843 said:
No, Moodys doesn't care if it's spending cuts, tax increases, or some combination of both, as long as the debt limit gets raised.

If you think Moodys wants 4 trillion in spending cuts alone, you're being sold a bill of goods by somebody. Moodys doesn't care about spending cuts.

Moodys is concerned that the U.S.A. isn't going to pay it's bills when they come due on August 3rd.

YES- ITS THE DEBT LIMIT that is going to end up sinking the credit rating of the USA.

The right-wingers are gambling with the full faith and credit of the USA to pay it's bills.

If the debt ceiling is not raised, Grandma isn't going to get her social security check, and veterns won't get their disability payments, and China woni't get it's bond payments. And THAT is what has Moodys worried.
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Dang, what a welcome back from vacation...

So, only the "right-wingers" are playing with this debt ceiling issue and the Democrats are angels. Are you really that naive? Or too partisan? Oh, what about me you say... I want a balanced budget like I have to have to have in my house, flat income tax with no deductions or no income tax and a national sales tax (NOT a VAT), and some common sense in DC.

Maybe if the Democrats would think about this...

In my house, I only make so much; and I can only spend that much. James, is your house different? When you max your credit cards and then call the bank, do they raise your credit limit? No, you can get another job or stop spending so much. (edit: oops, forgot about bankruptcy so your creditors and 'eat' your bad decisions.)
So, let America get another job (raise taxes) and see what happens to businesses (which OBTW CREATES most of the jobs in this country) have to decide on paying taxes or hire another employee.

Get rid of the special interest subsidies and tax credits; oil, solar(and other 'green' techs), ethanol, et. al. Quit allowing "ear-marks" and pass a balanced budget amendment to the Constitution.

Maybe, if BOTH sides (yes, James, both) quit playing politics we might make it out of this unscathed.

Oh, 2 last points.

- We will default on our debt when the President tells the Treasury Secretary to NOT pay it. We have enough revenues to pay our debt bills.
- I do love how you throw around the scare tactics about the VA payments to Vets, and SSA payments to Grandma... Why didn't you also be MORE political and throw in the paychecks to our Military in Iraq and Afghanistan who are fighting the war so you so abhore???

NOW, can we get back to making money?

And yes, gold is money.

Post Purgatory here I come ;)
 
James48843 said:
No, Moodys doesn't care if it's spending cuts, tax increases, or some combination of both, as long as the debt limit gets raised.

If you think Moodys wants 4 trillion in spending cuts alone, you're being sold a bill of goods by somebody. Moodys doesn't care about spending cuts.
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Will coming debt ceiling deal save America’s AAA credit rating?
Keeping America’s gold-plated credit rating may take both a deal to raise the debt ceiling (which will happen) and a meaningful deficit reduction plan of around $4 trillion (which is not happening). Moody’s says it wants a ”deficit trajectory that leads to stabilization and then decline in the ratios of federal government to GDP and debt to revenue beginning within the next few years.”
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FROM: Reuters

I didn't make it up....I'm not being sold anything. Here's the article. Now, I will say their PRIORITY is the debt ceiling. But it's not everything.
 
James48843 said:
No, Moodys doesn't care if it's spending cuts, tax increases, or some combination of both, as long as the debt limit gets raised.

If you think Moodys wants 4 trillion in spending cuts alone, you're being sold a bill of goods by somebody. Moodys doesn't care about spending cuts.

Moodys is concerned that the U.S.A. isn't going to pay it's bills when they come due on August 3rd.

YES- ITS THE DEBT LIMIT that is going to end up sinking the credit rating of the USA.

The right-wingers are gambling with the full faith and credit of the USA to pay it's bills.

If the debt ceiling is not raised, Grandma isn't going to get her social security check, and veterns won't get their disability payments, and China woni't get it's bond payments. And THAT is what has Moodys worried.
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Right on James!
 

QUESTION:


is gold "Money"?




Ron Paul asked Ben Bernanke, and you'll be surprised at his answer:


(Man, we're in a world of hurt.)
 
Frixxxx said:
I don't think it is the debt James,

Moody wants 4 Trillion IN SPENDING CUTS or they'll downgrade us.
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No, Moodys doesn't care if it's spending cuts, tax increases, or some combination of both, as long as the debt limit gets raised.

If you think Moodys wants 4 trillion in spending cuts alone, you're being sold a bill of goods by somebody. Moodys doesn't care about spending cuts.

Moodys is concerned that the U.S.A. isn't going to pay it's bills when they come due on August 3rd.

YES- ITS THE DEBT LIMIT that is going to end up sinking the credit rating of the USA.

The right-wingers are gambling with the full faith and credit of the USA to pay it's bills.

If the debt ceiling is not raised, Grandma isn't going to get her social security check, and veterns won't get their disability payments, and China woni't get it's bond payments. And THAT is what has Moodys worried.
 
I don't think it is the debt James,

Moody wants 4 Trillion IN SPENDING CUTS or they'll downgrade us.

I'm geared for the spending cuts not happening.

I'm hedged all around so this is a no brainer for me. Be in cash and gold/silver/currency when Aug 2 hits. That way, I can short or long the market as much as I want! And I'll be the next gazillionaire after all the fear eats the market up.... Now I understand economics....Don't be the prey...be the hunter!
 
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