Now that the globally respected firm of Standard And Poor has formally downgraded the ratings of the United States specifically, those bonds issued by the Department of the Treasury from triple A to double A, many consumers are wondering just what the implications of this decision will mean for their own lives. After all, with so much of the country still in the middle of debt relief nightmares (whether worrying about loan modifications as a part of mortgage debt settlement or simply ongoing credit card debt relief efforts), a sudden leap in interest or bout of inflation would be the last thing that our borrowers worried about their already backbreaking adjustable rates would be able to handle. Fortunately, though the news clearly is far from positive, we haven’t yet reached the end of days.
First of all, as business commentators are quick to point out, the diminishment of status is not quite the apocalyptic rain of fire that so many journalists have been quick to portray. “When a stock sees its ratings fall, that can really be something of a crisis, as the more responsible mutual fund managers immediately switch their holdings to a similar target thought to be a lower risk,” said Wilson Greggs, a veteran financial correspondent who’s covered the international bond market for decades. “If we’re talking about protected securities, though, the United States of America is still, for better or worse, the only game in town, and investors who want to put their money somewhere safe just don’t have a lot of alternatives. You’re not going to see panicked speculators fleeing in droves like what happened to Southeast Asia at the end of the 1990s.”
Furthermore, Greggs went on to say, the equally significant independent arbiter Moody’s And Fitch has kept their own triple A ranking upon the Treasury bonds, even if they’ve also expressed their own concerns about the eventual viability of the United States economic prospects. This hardly means that analysts believe the American financial engine to be sputtering towards a permanent halt, clogged with unrealized debt relief needs and desperate to avoid bankruptcy. If anything, the same recessionary effects that drove down investor faith in our government’s affairs should spur global interest in domestic corporations that have largely remained undervalued after the market downturn led them to a quiet period of capitalization (currently about two trillion dollars worth of liquid monetary resources held among the titans of industry).
Now, for the individual American fighting his or her own war against the forces of Annual Percentage Rates, the inevitable fall out from the ratings downgrade won’t contain the same sort of benefits, but the immediate dangers still avoid the doomsday scenario long threatened. Applicants for new mortgages, actually, should barely notice a difference since equity loans tend to be linked to ten year Treasury bills which remain largely unchanged, and, while folks attempting debt settlement for their adjustable rates might see the worst variants temporarily heightened, the end result should still be relatively infinitesimal. Borrowers struggling to comply with credit card debt relief plans are, as ever, the consumers most at risk of substantial monetary losses owing to fluctuations within the system, but, even then, a raise of five percent should be considered the absolute maximum under the most depressing of circumstances.