We are one major scare away from global financial markets unraveling

July 13, 2011 – WASHINGTON – Moody’s Investors Service put the U.S. under review for a credit rating downgrade as talks to raise the government’s $14.3 trillion debt limit stall, adding to concern that political gridlock will lead to a default. The AAA ratings of financial institutions directly linked to the U.S. government, including Fannie Mae, Freddie Mac, the Federal Home Loan Banks, and the Federal Farm Credit Banks, were also put on review for cuts, Moody’s said in a statement today. The U.S., rated AAA since 1917, was put on review for the first time since 1995 on concern the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes even though the risk remains low, Moody’s said. The rating would likely be reduced to the AA range and there is no assurance that Moody’s would return its top rating even if a default is quickly cured. “It certainly underscores the importance of passing the debt ceiling and not putting us in default status, and making sure there’s a longer term fiscal plan to contain spending and the deficit we’ve been running up over the last few years,” said Anthony Cronin, a Treasury bond trader at Societe General SA in New York, one of the 20 primary dealers that trade with the Federal Reserve. “Maybe it’s the impetus to say we’ll need more of a concession.” The dollar weakened and Treasuries were little changed after the Moody’s statement. IntercontinentalExchange Inc.’s Dollar Index, which tracks the greenback against the currencies of six U.S. trading partners, including the euro, yen and pound, slid for a second day, shedding 1.1 percent. –Bloomberg

High Cost of War on Terror: The economic cost of spiraling foreign wars by an American empire that is bankrupt, over-stretched and seeing its economic foundation and infrastructure crumble just as a new century of untapped technology sits on its doorstep is one more sign of how oblivious the world is to the impending global financial collapse that is now threatening every economy in Europe. The Russian military strategy in 1812 of luring an egotistical and over-confident Napoleon and his army further and further into the heart of the vast expanse of Russian territory until the savage winter destroyed him and brought ruin to France seems to be lesson long forgotten by history. The asymmetric warfare conducted by Islamic fundamentalist terrorists was never designed to defeat America; it was an 1812 strategy designed to financially bankrupt the nation in responding to them- luring the U.S. further and further across the globe until its military was over-taxed, bankrupt, and depleted of both revenue and natural resources. The cost of U.S. military action in Iraq, Afghanistan and Pakistan will run to at least $3.7 trillion, according to a study commissioned last month. The staggering figure could reach as high as $4.4 trillion, with the deaths of up to 258,000 people, according to research by Brown University’s Watson Institute for International Studies. The precipitous rise in global commodities prices and the growing crime of scrap metal thefts are testament that the value of paper currency is withering away into nothingness from over-printing. The Bible warns the danger of hubris in the last days will lead to our undoing: “For when they shall say peace and safety; then sudden destruction cometh upon them, as travail upon a woman with child; and they shall not escape.” 1 Thessalonians 5:3               –The Extinction Protocol

Drowning in debt and no big solution   (c) EuroNews 2011