one country's economic rating

[ralf-nz]

http://www.odt.co.nz/news/business/1...nz-be-offended

The essence: Put it in perspective!

[Jo Jo]

"In New Zealand, political stability has served the country well. The hottest political topics this week? The question of whether the government should hold an inquiry into the price of milk - and whether the official Adidas jerseys commemorating the upcoming Rugby World Cup are too expensive."

Love it!

[ralf-nz]

"In New Zealand, political stability has served the country well. The hottest political topics this week? The question of whether the government should hold an inquiry into the price of milk - and whether the official Adidas jerseys commemorating the upcoming Rugby World Cup are too expensive."

Love it!

That is exactly what I meant by perspective!

[dragonrides]

"In a biologically-based economy, you can't just crank out another cow overnight," he said. "It's a structural weakness as well as a strength."

I find this comment laughable, apparently Mr. Kyran Curry hasn't learned the lesson that blindly pursuing growth is exactly the reason that leads to bust of the US/global economy.

The less New Zealand is involved in the consumerism, the better off the country will be in a long run. If the bankers run the show, they will inevitably exploit the real resources (like the cows) out of any place. It is so true that it can be a weakness (to money managers) and a strength (to average Joe), depending on your perspective.

[sophiedb]

brilliant

[TJH]

"In New Zealand, political stability has served the country well. The hottest political topics this week? The question of whether the government should hold an inquiry into the price of milk - and whether the official Adidas jerseys commemorating the upcoming Rugby World Cup are too expensive."

Love it!

Coming from the US this sort of thing was a shock at first. While there is a lot of political discourse and debate in NZ, the government is pretty efficient and responsive compared to the US political system which is currently by any measure a disfunctional mess.

Of course, kiwis like to complain about how bad their government is and how bad the political system is, but I think complaining about such things is a universal human condition and all a matter of perspective. While the NZ government/political system is not perfect, it is far better than the vast majority of the current systems out there.

[Super_BQ]

Word from the wise, regardless who makes these ratings (S&P, Moodys, etc). The all don't mean a thing. If ANY of these rating groups knew anything, then how come they couldn't see the sub-prime fiasco in 2008? These ratings agencies just dish out reports but they hold no real substance in making investment decisions.

When Hanover Finance was advertising on TV with their BBB rating? (or was it BB+), who would of known the level of risk back then when investors had lost all what they had put in? The letters don't mean a thing.

[djangoswing]

My only problem with the US AA+ rating is that it's too high. Honestly the math isn't hard to do. How high is US Sovereign Debt? Really high. Can we pay it off? Not unless we monetize it because growth doesn't seem to be an option. What was the debt used for? To pay for vacations or 3rd cars that we don't need / afford and wars. Can we pay the interest? For now but only because we can find suckers, uh I mean investors to lend at near 0%. Who owns the debt? Clue: a country that rhymes with "China" (to be fair, not all of the debt). Raise taxes? Nope. Cut spending? Nope.

AA+? US Sovereign debt should be rated "J" for Junk and NZ should be promoted to AAA.

[Super_BQ]

My only problem with the US AA+ rating is that it's too high. Honestly the math isn't hard to do. How high is US Sovereign Debt? Really high.

The reason for US's high rating is as a country on the whole, it has the best system for economic prosperity. In the past 100 years there has not been many 'large' nations that can beat it. We can go back further to the English UK (England) system where England was considered the leader of the world as they sailed their ships around the world. You have to question why has the US been able to trump the UK system in such a short time? Because of these factors, the math shows that there isn't any other country that can do better (considering social well-being aspects too).

Can we pay it off? ....

IMO, yes. The US has a far better chance than say Greece does.

Raise taxes? Nope. Cut spending? Nope.

I would say yes to raising taxes and yes to cutting spending.

Something to think about. What state of the world economy would be if the US was in junk status? I mean look how bad the European Union is in comparison. But as I said before, these ratings by so called expert rating agencies mean nothing. They're playing a game that is trying to forecast the end of the world (which is full of speculation and scepticism). Truth is NOBODY knows.

The other aspect is (and to give credit to China) is that the world international trading currency is in USD. Why? Because it makes sense to trade in a currency whom the county is the biggest economic power house. Yes China will surpass the US in a few years time as being the biggest economy in the world but still - even being #2 biggest means a lot. By comparison to NZ, well NZ would only be a grain of sand to the economic #s that the US or China has.

[Steve_B]

IMO, yes. The US has a far better chance than say Greece does.

I'm not so sure. When zero's are added to an already huge figure, people tend not to comprehend the scale and vastness of the problem.

The following quote puts things in to perspective

How hard is it to spend a trillion dollars? If you spent one dollar every second, you would have spent a million dollars in twelve days. At that same rate, it would take you 32 years to spend a billion dollars. But it would take you more than 31,000 years to spend a trillion dollars.


From what I can gather the US debt is running at around 13+ trillion.