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Veteran Advisor

Down grading US debt does it help or hurt?

Well the political class just keeps giving me new hope that they are gonna snatch defeat from the jaws of victory.

With the down grading of the US debt rating today  ( like we had to be told what we already knew) they have really pushed the puppet masters into the corner. 

First off they have given a reason for the bond buyers to ask for more interest as they now have true info that says we are a risk.

Second they have made the flight to safety look less like and option and now like the life preserver.

Gold is nearly 1500 an ounce! silver at 43 corn is strong again.

Now with the weather delays and the run to strength will we see the next leg up in the corn market?  I think so. This is a powder keg. a weather market with inflationary pressure. Hold on to your butts guys this is gonna get exciting.

And who really believes that the magic number of 165 is still possible?  Last year here in NC Iowa we had perfect weather. we are far far from that now.

What is there to put downward pressure on this market?

Only thing will be demand but demand has to shrink even more to make up for lost yield.So now not only do we have to ration demand for this years crop but next years also!

Oh yea looking at the weather forecast for our local it doesn't bode well for planting for the next 10 days for sure and if we get the snow they are talking about we will get even more delays.

That is why I think there is still a lot of room in the soys as well. Just because we switch acres doesn't mean we get big yields. I think most here will wait until the last possible day to switch to corn therefore trend line yields in soys are far from probable.

In other words I still think it is to early to commit the physical and far to early to throw in the towel also.

And then we still have the debt ceiling fiasco and the 12 budget our dollar is strong today against other currencies because while we had bad news we didn't suck as bad as the rest. SO today we were just the least sucky play.  Ain't this fun?  What do you guys think?

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6 Replies
Senior Advisor

Re: Down grading US debt does it help or hurt?

Maybe the government could hire that johnson dairy outfit bankruptcy legal outfit and get the treasury off for pennies on the $$$$---what a joke for the state of Colorado  and the guy that does the right thing --instead of to much greed to succeed-

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Senior Advisor

US. Debt was not downgraded

There was simply a statement that it could be downgraded in the future.

 

The ironic thing is that the grading service that are government sanctioned would not call the credit swaps anything but AAA+, but now are preemptively talking about downgrading US Bonds. It really is supremely ironic. They should be in court for fraud - and in fact maybe this is connected in some lame way.

 

It matters little at this point. If the US debt is still considered the preferred haven by those seeking safety and tax credits the the auctions will determine the outcome. None of this is news to anyone who matters.

 

 

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Veteran Advisor

Re: US. Debt was not downgraded

I understand the statement that they sent out today did imply that this was a future thing however. like you mentioned how much credibility does this group really have?  Don't the majority of people already believe we are hosed? I also agree that the rating agencies should be held accountable for the fraud that they approved on the US taxpayer. BUt when you woun't punish the folks who are not paying taxes in the capital how are you gonna hold a wallstreet tycoon accountable.  I think they call this a circle jerk.

In the end it is gonna be good for grains till it isn't anymore.

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Honored Advisor

Re: US. Debt was not downgraded

No one who understands accounting and our demographic position still considers US Bonds to be AAA. Just the math of it and math is difficult thing to overcome.

 

JR....Palouser is right...the rating agencys are all incredibly not in jail. So, I don't really think them pointing out the obvious has much meaning. The USA could indeed right its fiscal ship, pretty easy really, just happens to require taking candy from benefits addicted babes....which of course includes us farmers getting direct subsidy payments. This will be talked about years from now, the obscene benefits paid to multi-millionaires who just happen to be all of us. It is a SNL skit just waiting to happen.

 

THE Ponzi scheme of all time is the US BOND market, and the fed manipulating it higher when it is already obscenely high (meaing rates are very low) just think about the marginal cost to push the needle 50 basis points. Ponzi would be very proud.

 

 

 

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Advisor

Re: Down grading US debt does it help or hurt?

   Nothing serious on the gummint financial woes will be done until their backs are agin' the wall.  They just don't realize you have to spend less than you take in to right your financial ship.  I still can't make up mind as to go in debt at these low interest rates or stuff money in a mattress for a coming collapse.   Listening to Schumer talk finance reminded me of my late father in law chastising me for not spending more freely for frivolous things.   He was a big shot in an international company and will leave his kids with maybe 30K each.   Somehow over the years the people who rise to the top be it in gummint or large companies just don't seem to have any sense when it comes to finances.

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Senior Advisor

Re: Down grading US debt does it help or hurt?

I think if one had a sizable sum of equity in cash---where off shore would any safer choice be than right here or our nieghbor to the north----have had a experience with exchange rates in the transportation business and the fallout from this could be very tramatic if done with very much volume--fool me once--no thanks---point being send your $$$$ to Boznia if you want ???  

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