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Ron Paul: "America's AAA Rating Not Worth Saving" Because "We Are Insolvent"
Zero Hedge ^ | 07/14/2011 | Tyler Durden

Posted on 07/14/2011 12:03:53 PM PDT by SeekAndFind

The man who yesterday got into a heated argument with the chairsatan on whether gold is or isn't money (a Bernanke response already mocked to death so we will leave it alone), shares his take on the most recent bout of scaremongering by Moody's (with S&P doing in private today what Moody's did in public yesterday) with Bloomberg TV's Erik Schatzker. When asked if the American AAA rating is worth saving, his reply: "probably not."

Paul continued: "I think if you had a market evaluation on this issue, it should have marked down a long time ago." The reason the downgrade will come regardless is that "ultimately that is going to happen anyway because we are insolvent."

The big picture: "I think it is part of the game to make sure everyone is fearful so we continue this process. Long term, I think raising the debt limit is a negative because it delays the inevitable. It will give us much bigger problems down the road. Today and tomorrow, if Moody's does not lower the bond rating, it will be helpful in the short run. In the long run, it will be more devastating because Congress will go back to their old habits again." Said otherwise: Moody's is concerned about US debt now, but is not concerned if US were more tomorrow - sheer idiocy."

Full Bloomberg TV:

CLICK ABOVE LINK FOR THE VIDEO

Paul on whether the AAA rating is worth saving:

"Probably not. I think if you had a market evaluation on this issue, it should have marked down a long time ago. I always wonder about these ratings. Bond ratings before the crash three years ago were not very helpful. Sometimes I wonder whether this is more of a political theater to build up the fear. First, we won't be able to write the checks for Social Security and the next thing there'll be a down rating of bonds."

"The market does the final rating. I think our solvency in our dollar is better rated by the price of gold rather than what Moody's will say. In the short run, what Moody's does will have an effect."

Paul On a potential situation where Moody's cuts the AAA rating and whether the U.S. can afford it given that entitlements and discretionary spending are already trying to be cut:

"That will move it along, but ultimately that is going to happen anyway because we are insolvent. We play along with this game with Social Security. We know it is insolvent. We know that if it were an insurance company, it would be in big trouble. It is true that this rating will have an effect, but it is a short-term effect. Ultimately, the fundamentals show this country is bankrupt."

"If they do this, this will be very significant, but I think it is part of the game to make sure everyone is fearful so we continue this process. Long term, I think raising the debt limit is a negative because it delays the inevitable. It will give us much bigger problems down the road. Today and tomorrow, if Moody's does not lower the bond rating, it will be helpful in the short run. In the long run, it will be more devastating because Congress will go back to their old habits again."

Paul On whether the tradeoff in favor of the AAA rating is worth making:

"On the short run it is, but in the long run it makes things worse."


TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Government
KEYWORDS: creditrating; debt; debtceiling; ronpaul

1 posted on 07/14/2011 12:03:59 PM PDT by SeekAndFind
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To: SeekAndFind

Ron Paul: “Bush ordered Cheney to fly planes into the World Trade Center! Steel won’t melt like that unless Cheney sprays it with Chenium!”


2 posted on 07/14/2011 12:11:49 PM PDT by humblegunner
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To: humblegunner

that statement is crazy.. he was spot on with wanting to audit the fed.


3 posted on 07/14/2011 12:12:59 PM PDT by rokkitapps ( Hearings on healthcare waivers NOW! (If you agree make this your tagline))
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To: SeekAndFind

if we’re going to crash the country then lets do it now before the muslims and marxists get any stronger.


4 posted on 07/14/2011 12:13:13 PM PDT by Ouderkirk (Democrats...the party of Slavery, Segregation, Sodomy, and Sedition)
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To: humblegunner

Is Ron Paul a Truther?

See here :

http://seoblackhat.com/2007/07/27/ron-paul-not-truther-interview/

But let’s say he is...

Are you implying that because Ron Paul is a truther, he therefore does not have any useful insight on our fiscal and monetary policies?


5 posted on 07/14/2011 12:15:08 PM PDT by SeekAndFind (u)
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To: Ouderkirk

honestly, I really hope every crashes. I mean everything. I am sick of sending money to china. Everything goes back local. We do what we want, when we want. If you step out of line, a mob forms and kills you. Sounds fun, right?


6 posted on 07/14/2011 12:16:51 PM PDT by rokkitapps ( Hearings on healthcare waivers NOW! (If you agree make this your tagline))
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To: SeekAndFind

in other words we’re kind of like the unemployed fellow with a 745 credit score


7 posted on 07/14/2011 12:19:36 PM PDT by Buckeye McFrog
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To: SeekAndFind

Because the US government has the right to confiscate the entire wealth of the country, it is no where near insolvent from an investor’s perspective. It is only if it were perceived to be willing to reneg on its obligations that it would be uncreditworthy.

So Ron Paul is advocating the ultimate self-fulfilling prophecy.


8 posted on 07/14/2011 12:20:38 PM PDT by 9YearLurker
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To: SeekAndFind
"On the short run it is, but in the long run it makes things worse."

Nobody cares about the long run. If anyone in the last 60 years were even remotely concerned with the long run we would not be anywhere near where we are today.

Americans need to march slow and steady south. Instead we are sprinting as hard as we can north. Everytime we run out of energy, we change from sprint to walk. As soon as we catch our breath, we start sprinting again. Never, ever, ever, do we even considering walking in the other direction.

9 posted on 07/14/2011 12:23:54 PM PDT by douginthearmy
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To: SeekAndFind

Right again. We are insolvent. When you have to borrow 40% of every dollar you spend every month you are insolvent.


10 posted on 07/14/2011 12:24:40 PM PDT by screaminsunshine (Socialism...Easier said than done.)
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To: 9YearLurker
We take in 2 billion a month; 2.4 trillion a year. The debt is 14 trillion. If more money is spent than comes in, that is the definition of 'insolvent'.

It the U.S. were a business, it would have been in bankruptcy long before this and its assets sold and it would no longer exist.

11 posted on 07/14/2011 12:26:12 PM PDT by Parmy
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To: Buckeye McFrog

Exactly. That’s a great analogy.

}:-)4


12 posted on 07/14/2011 12:27:59 PM PDT by Moose4 ("By all that you hold dear on this good Earth, I bid you stand, Men of the West!")
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To: SeekAndFind
Are you implying that because Ron Paul is a truther, he therefore does not have any useful insight on our fiscal and monetary policies?

Naw, I'm implying that he's a kook.

He can be right on one issue out of twenty.

That means he should be kept away from nineteen out of twenty issues.

He's a kook.

13 posted on 07/14/2011 12:34:03 PM PDT by humblegunner
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To: SeekAndFind

If we’ve got to take a hit in our credit rating, I’m all for it if it keeps the Krazy Kenyan from borrowing and spending more money.


14 posted on 07/14/2011 12:58:26 PM PDT by FlingWingFlyer (Hey Barry! Compromise this!!!)
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To: SeekAndFind

Sounds like the thinking man’s non-”ElFoldo” type, who will always have plenty of enemies because of it.


15 posted on 07/14/2011 1:08:26 PM PDT by RitaOK (We hang together or will hang separately. 2012, or bust)
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To: humblegunner
He can be right on one issue out of twenty.

That means he should be kept away from nineteen out of twenty issues.

He's a kook.

Yep...and he's a kook who loves attention.

16 posted on 07/14/2011 2:52:28 PM PDT by Allegra (Hey! Stop looking at my tagline like that.)
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To: 9YearLurker
Because the US government has the right to confiscate the entire wealth of the country, it is no where near insolvent from an investor’s perspective.

Oh, really?

Would you invest in a country where the government had confiscated the entire wealth (or just, say, half)? Ron Paul may not be presidential material, but he's right.

17 posted on 07/14/2011 4:23:27 PM PDT by BfloGuy (Nobody is in a position to decree what should make a fellow man happier. -- L. Von Mises)
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To: BfloGuy

Well, it’s already got 1/3 of the land...


18 posted on 07/14/2011 4:25:03 PM PDT by 9YearLurker
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To: SeekAndFind; bamahead

Bump and ping.


19 posted on 07/14/2011 5:13:41 PM PDT by dcwusmc (fA FREE People have no sovereign save Almighty GOD!!! III OK We are EVERYWHERE)
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To: SeekAndFind

He’s right on this as least.


20 posted on 07/14/2011 7:18:13 PM PDT by oblomov
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