S&P affirms the U.S. AAA rating but downgrades the outlook to negativeBoom! That's the sound coming from the White House as its monetary moves and strategy's, including QEII, have culminated in the downgrading of the outlook on U.S government debt to negative. What could this mean?
Flash back less than one week to April 14th and the article "If the federal budget was a pie, it would look like this. Don't use this recipe in your house!"
What if U.S. borrowing costs went up?
"... Increased federal borrowing costs through higher required interest rates due to an imposed risk premium by our lenders will effectively throw the United States into a fiscal death spiral.
We will face larger deficits requiring higher interest rates leading to larger deficits and so on until we will be in the same condition as the EU PIGS Greece, Ireland and Portugal paying 10%+ to borrow money..."
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