Weekly Topic: Rating Agencies Downgrade Euro Zone & Then Some

[cieldumort]

Eurozone Credit Downgrade & Then Some

Ratings agencies which just last year were threatening to cut the USA's top credit rating (and which one did), just followed through on another threat: they have chopped away at the ratings of several of the largest European economies, with warnings of potentially more to come.

Now, as if to add insult to injury

Comments

[ragnarok20]

I will preface this by saying that politicians are apt to change their mind, as most people are. However, if I recall correctly, Germany has already declined to further bail out failing economies such as Greece. Furthermore, if an anti-interventionist (and let's not mince words here, as being anti-interventionist is not merely a synonym for pro-isolationist) president is elected in the U.S., as is becoming a very real possibility with Ron Paul's showing in the polls, Germany will no longer be capable of funding many of their socialist policies as the U.S. promise of military protection will be rescinded, necessitating that Germany build a larger standing army which it has not had since WWII.

[cieldumort]

I put Ron Paul's odds of being elected president in 2012 at less than 5%, and that might be generous. His brand sells well in certain primaries of certain states, but in a general election, he would even have the establishment GOP endorsing Obama, and that's not hyperbole, let's not kid ourselves about that.

I think Germany will come to the rescue again because their economy is an export one, and a deep and long EU recession will almost certainly throw the US into at least a moderate recession, as well. So, it is in Germany's best interest to help prop up the global economy.

In addition, I sort of suspect that Germany does not mind the idea of buying themselves further into being the primary European power.

[ragnarok20]

In polls where Ron Paul is pitted against Obama, he does as well as Romney within a statistical margin of error. Lest we forget, presidential elections are about grabbing independents.

[cieldumort]

Still, that is now - but if the monied interests start to freak out, you can forget it.