The attention given by the Mainstream Media to the downgrading of British debt by Moody’s to slightly less than triple A only goes to prove how ill they serve us.
It might be more interesting if it were Cornwall that had been downgraded, which is one of the few UK counties to have a credit rating (as a result of some pernicious LOBOS loans taken out before its creation as a unitary council) and of course, a currency user not a currency issuer. But they are not referring to a currency user but a sovereign government which issues debt in its own individual currency.
So what does the downgrading by Moody’s mean?
Simply that they feel (unsurprisingly) that circumstances are getting more difficult for British citizens.
But precisely nothing on repayment of UK government debt, which they are rating. To suggest otherwise is a fantastical credit rating agency delusion of grandeur.
Moody’s is, like other credit rating agencies, owned by some of the banks it advises.
So these banks are encouraged in similar fantasies. They are presumed incapable of realising that sovereign debt never, ever has to result in a default. So one must imagine that these geniuses think that the UK is now just a tiniest shade more likely (from AA1 to AA2), voluntarily, to default on a bond which it has issued in its own currency and which it creates and controls.
The lunatics have not only taken over their own asylum and some in the banks they advise, they have taken over the media as well. So worthy sounding economists are interviewed who say that these ratings agencies are slightly less important than they used to be because they got the US subprime mortgages so wrong (all rated triple A, lest we forget). And of course because of QE and the economic slowdown there isn’t an awful lot of debt around now.
The media then implies that whilst we still have to watch it, we can all breathe a small sigh of relief on behalf of our future governments.
The audience are thus duped into believing the way the world doesn’t work.
It is high time that ratings downgrades for sovereign currency issuing nations provoked journalists to ask whether, perhaps, the sovereign currency was issued in Cloud Cuckoo Land.