If you were rated AA, would it make you happy?
Apr 28, 2010
The credit ratings agencies have long employed an inherently deceptive credit rating system that reflects governmental tendencies to employ Orwellian "Newspeak" in order to deceive people.
Coffee houses used to advertise three sizes: small, medium, and large. Then they took the advice of some high-priced ad agency and changed it to : big, huge, and monstrous without changing the actual size of the products.
When I went to school (back in the dark ages), I was graded from A to F or by a numeric system from 100 to 75. Those were trustworthy numbers. What you see is what you get. There was no such thing as a AA or AAA on my report card. The best possible was A+, which was the equivalent of 98-100, that is, a High A. This was an honest grading system.
But today, when you look at the credit-rating agencies like Moody's or Standard and Poor's, we find that no one gets a C any more. I always thought a C rating was average. But what happens when a BB- rating is given to a flunkie government? Yesterday, Standard and Poor's gave Greece a BB- rating, which is defined as "junk status." This is the equivalent of the siren sounding to warn us of an imminent crash--or a Failed State (F rating in my book).
If I had gotten a B- in school, I would have still been above average. But when a government gets a BB- it's a near-death experience. Why all the "A's" and "B's" instead of just using the old-school grading system that gives people an honest rating from A to F? I wouldn't even object to adding the system of + and - to those single letters, as long it were an honest system.
Standard & Poor's downgraded Spain one notch to double-A from double-A-plus and kept a negative outlook. The ratings agency also said Spain would likely see an "extended period of subdued economic growth" and cautioned that it could face another downgrade.
"Believe it or not, Moody's and Fitch still have Spain as a triple-A credit. We don't think that can last, and we see multiple downgrades ahead for Spain," said Win Thin, senior currency strategist at Brown Brothers Harriman & Co. "Spain is the 800-pound gorilla in the room. Greece and Portugal are small countries, but Spain is about five times their size with regards to GDP," he said.
Spain's financial problems have been going on for a long time. S & P was giving Spain the highest credit rating at AAA until January 19, when it was downgraded a notch to AA+ on the grounds that its deficits were getting too high for its GDP.
Spain enjoyed a AA+ rating until today, when S & P downgraded it to a mere AA. This is sending shock waves throughout Europe, as if everyone has been caught by surprise. This is the kind of farcical behavior that makes financial wizards look like total idiots. Is the mental institution being run by the inmates? Why is it so hard to for the experts to see the obvious? Does it take a degree in economics to ensure such blindness?
It's like they have memorized all the facts and figures, but no one knows how to think.
Personally, I question the sanity of anyone who would buy government bonds. Why would anyone fall for a triple-A rating, and then panic when it drops to a mere AA? Why is a AA rating so bad, when it looks so good on paper?
Virtually all Western nations have drunk the wine of Babylon's Socialism in the past century. That ideology eventually fails when people discover that they can stop working and still get paid. As long as there are working people willing to support the non-workers, Socialism works--until the non-workers outnumber the workers. But at some point the workers are so heavily taxed to support non-workers that they look for ways to switch sides. That way they can enjoy working less while receiving nearly the same amount of money.
The problems of Socialism are compounded by Democracy, where the non-working people can vote themselves the benefits of the public trough, and politicians must promise them the moon in order to get elected.
None of these problems rise to the surface immediately. It is only after Socialist Democracies are fully entrenched that they prove to be unsustainable in the long run. By that time, the people think they deserve an accepted standard of living, whether they work or not. So when nations like Greece run out of money from all the Socialist programs demanded by the people, they are threatened with bankruptcy and need a bailout. Then, when the Germans are forced to bail them out, and they demand some realistic belt-tightening, the Greeks riot in the streets as if they are entitled to German money as a divine right.
This situation is bound to be duplicated throughout Europe and America, as long as people think the world owes them a living. Socialism as an ideology is reaching the end of its course, even as Communism was discredited two decades ago when it became unsustainable. The world is sitting on a powder keg while government officials play soothing music to keep us from panic.
But when the spark hits the powder, the entire Babylonian experiment in Socialist Democracy will come to an end. That is the point where we will have the opportunity to show the world the benefits of the Kingdom of God under Jesus Christ the King. We are, in the end, monarchists. We may or may not have faith in mere mortals ruling over us as monarchs, but we do advocate the ultimate form of Monarchy.
I believe that the collapse of the world's Socialist ideologies fulfill the prophecies of the great Stone hitting the image of Babylon on its feet. It will prepare the world for the Kingdom of God, ruled not by men or even by mere Christians, but by the overcomers.
Dr. Stephen Jones