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CREDIT RATINGS , DEBT, & STUFF!

November 29, 2004

I don’t know about you but I am always trying to improve my credit rating. I’m not looking for perfection- just making sure I am a good witness in that area. I check on my FICOR annually and while I strive to be debt free, I am not an extremist in this area doing away with all credit cards, etc.

It seems that our Federal government is of another opinion. Bush and Co. are spending money, piling up debt, and signing massive bills and programs (like the recently passed Medicare bill) that makes the Democratic social prgrams look conservative. Speaking of conservatives: they are beginning to abandon Bush as well.

Last week, Moody’s issued a CREDIT WARNING on our own Federal government. As the Dollar keeps tanking, interest rates can’t do anything but rise.

The median deficit for all industrialized nations as a percent of GDP is 1.3%: America’s is 3.5%! Our Federal debt is 215% of total revenues. If we keep up thise pace, one day the Dollar might be nothing more than junk status. As I said sometime in the last two weeks, net foreign purchases of U.S. securities dropped from $49.9B in August to $4.19B in September. And, when they stop buying, interest rates have to rise- quickly. Then, so much for the stock market.

Last week, gold traded over $400 an ounce on two occasions- intraday. My bet is that gold will CLOSE over $400 easily in December, if not this week! Why? People want to hold on to something that has real value, not fiat money (be it Dollars, Euros, or Yen). Since the Federal Reserve was established 90 years ago, the Dollar has lost 97% of its value. Boy, is the Fed ever looking after us or what?

I don’t think December is going to be anything like the Wall Street
stock brokers are promising.

Written by Ernie · Filed Under Daily Commentary 

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