Monday, July 25, 2011

What Would You Do If you Were Rating our Debt?

Gold is heading toward $1,700 per ounce which is simply hard to fathom when you view gold historically.  Each of us have more than an elementary understand of the impact and implication of our "credit score" so my question, if 900 points is a perfect credit score, how would you rate the United States economy today?  Really, think about it but more importantly, think about the implications of this lowering today and for far too many tomorrows!

The Bible is quite clear that whomever owns your debt does in fact own you, the debtor. We know that,!We get that!  But I saw a most interesting table today from The Economist that actually showed the listing of who owns the US debt and was amazed to see the United State Federal Reserve is one of the greatest owners of our future.  Sure, foreign countries, many of whom do not like us or our way of life, is a relatively small portion of the debt holders when you weigh in the Social Security Administration, Medicare and Medicaid and oh yes, our military just to name a few.

Those that know me know I do not enjoy rattling sabers or talking about the sky falling but honestly, with one week remaining and seeing daily the lumbering sluggishness of our political process, the feasibility of a bill making it through both Houses and to the President between now and then is, well, you do that math! But I think there is a greater issue unfolding when you view this as a very personal / individual perspective ... the threat of a lower credit rating.  Greece has had that happen three times of late so I ask myself, given all that is going on, debt ceiling or not, why have the credit rating agencies already lowered our credit score / rating, right?

I will close by underscoring the serious nature of this whole matter but in the underscoring I keep reflecting on a much used Winston Churchill comment that the United States does everything wrong before they get it right ... At this stage it is every concerning to me in long term in our government's ability to get this right for we have blatantly proven Winston correct!

Breaking an addiction is hard to imagine until you have seen first hand what is required to break it whatever that addiction is. We, as a nation, are addicted to living above our means on somebody else's money.  What we are witnessing is a correction; a correction that is painful and dangerous that is forcing our actual GDP / capita or our standard of living into a range we can sustain which makes us more like the French and Germans in standard of living terms. That is not all bad until you factor in the almost immeasurable mountain of debt that clogs up the starting blocks of recovery. 

My challenge to anyone reading this ... as the Scriptures teach us ...GET OUT OF DEBT!   Watch the trajectory of gold price spike north and know that is truly frightening!   Pray for our LEADERS!

No comments:

Post a Comment