The US AAA downgrade means nothing, short term. Long term, it’s huge
We already know America has a debt problem. But there are signs bond markets will force more prudence on its government, sparking a potentially seismic shift.
The biggest losers from the decision by Moody’s to strip America of its last AAA credit rating may well be inside the ratings agency itself.
When S&P Global cut the US rating in 2011, then US Treasury Secretary Tim Geithner got snippy and chastised them for “really terrible judgement”. Within a few weeks – apparently in a big coincidence – the Justice Department launched an investigation into the firm’s GFC ratings and its CEO was out of the door.
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James Thomson is senior Chanticleer columnist based in Melbourne. He was the Companies editor and editor of BRW Magazine. Connect with James on Twitter. Email James at j.thomson@afr.com
