Thread: U.S., U.K. Move Closer to Losing AAA Rating.

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  1. #1 U.S., U.K. Move Closer to Losing AAA Rating. 
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    U.S., U.K. Move Closer to Losing Rating, Moody’s Says

    By Matthew Brown

    March 15 (Bloomberg) — The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.

    The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.

    Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.

    “We expect the situation to further deteriorate in terms of the key ratings metrics before they start stabilizing,” Cailleteau said. “This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics.”

    http://www.bloomberg.com/apps/news?p...d=a0a8xAghPS8I
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  2. #2  
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    I see inflation on the horizon if our debt continues at this pace. Losing our AAA rating would likely cause a spike in interest payments. Commodities like gold and oil would also go up in my opinion.
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