Comments on: Uncle Sam’s Credit Score http://www.creditloan.com/blog/2009/01/05/uncle-sams-credit-score/ Thu, 17 Mar 2011 02:02:00 +0000 hourly 1 By: Bill in Detroit http://www.creditloan.com/blog/2009/01/05/uncle-sams-credit-score/#comment-3700 Bill in Detroit Tue, 01 Dec 2009 09:24:42 +0000 http://www.creditloan.com/blog/?p=194#comment-3700 It's my understanding that there are already nations (such as the Soviet Union) which do not accept dollars as their reserve currency. When GDP (goods + services) cannot keep up with the flood of new currency ($800B is a pretty large peach pit to deal with), the value of the dollar goes down. It goes down relative to specie and it goes down relative to other currencies. As closely tied together as the two nations are, currently the Canadian dollar is worth more than the USD ... an abrupt shift from past decades. Our pennies now have so little value that the raw copper is worth more ... so, having abandoned the gold and silver standards, we are acknowledging defeat against the de facto copper standard, too. New pennies are plated to look like copper ... old pennies are being melted down to make wire with. It’s my understanding that there are already nations (such as the Soviet Union) which do not accept dollars as their reserve currency.

When GDP (goods + services) cannot keep up with the flood of new currency ($800B is a pretty large peach pit to deal with), the value of the dollar goes down. It goes down relative to specie and it goes down relative to other currencies. As closely tied together as the two nations are, currently the Canadian dollar is worth more than the USD … an abrupt shift from past decades.

Our pennies now have so little value that the raw copper is worth more … so, having abandoned the gold and silver standards, we are acknowledging defeat against the de facto copper standard, too. New pennies are plated to look like copper … old pennies are being melted down to make wire with.

]]> By: Self Deprecate http://www.creditloan.com/blog/2009/01/05/uncle-sams-credit-score/#comment-3671 Self Deprecate Wed, 18 Nov 2009 19:33:13 +0000 http://www.creditloan.com/blog/?p=194#comment-3671 Interesting post, I will say! Interesting post, I will say!

]]> By: zed durant http://www.creditloan.com/blog/2009/01/05/uncle-sams-credit-score/#comment-590 zed durant Sun, 01 Feb 2009 01:07:14 +0000 http://www.creditloan.com/blog/?p=194#comment-590 This post only shows how silly the credit score system is. Now lets see the credit score for banks receiving billions in bailouts. Bankers are usually several times more leveraged than their customers and yet have the nerve to use credit scores in determining loan qualification. There is ample evidence that lenders are some of the worst judges of credit worthiness. Were it nor so many would not be in the trouble they are. This post only shows how silly the credit score system is. Now lets see the credit score for banks receiving billions in bailouts.

Bankers are usually several times more leveraged than their customers and yet have the nerve to use credit scores in determining loan qualification. There is ample evidence that lenders are some of the worst judges of credit worthiness.

Were it nor so many would not be in the trouble they are.

]]> By: Ray http://www.creditloan.com/blog/2009/01/05/uncle-sams-credit-score/#comment-577 Ray Thu, 22 Jan 2009 15:49:59 +0000 http://www.creditloan.com/blog/?p=194#comment-577 The US credit score is barely above mine, then why is it so hard for me to obtain a loan? Doesn't seem right. The US credit score is barely above mine, then why is it so hard for me to obtain a loan? Doesn’t seem right.

]]> By: warren mosler http://www.creditloan.com/blog/2009/01/05/uncle-sams-credit-score/#comment-533 warren mosler Sat, 10 Jan 2009 15:53:26 +0000 http://www.creditloan.com/blog/?p=194#comment-533 Yes, this is ridiculous for a govt that uses its own non convertible currency and a floating exchange rate policy. Note that Japan's debt is triple ours as a % of its GDP, it's been downgraded below Botswana, and has been instantly selling its securities at near 0 rates for over 10 years. Turkey has run inflation rates of over 100%, has had a currency that was dropping at over 50% annually, and had no trouble selling quadrillions of lira securities when no one had calculators that even went up that high. Clearly selling govt securities for non convertible currency with a floating exchange rate policy has nothing to do with 'solvency' nor is solvency an issue. A credit score in local currency is inapplicable. More important, the govt deficit EQUALS (by identity- national income accounting) to total net savings of financial assets of all the non govt. sectors. So the larger the deficit the larger the savings outside of govt, because that's where all net savings of financial assets comes from. Today, govt. spending is nothing more than an entry on its own spreadsheet. That is the ONLY way govt. funds are ever spent. Get over it and move on! Warren Mosler www.moslereconomics.com Yes, this is ridiculous for a govt that uses its own non convertible currency and a floating exchange rate policy.

Note that Japan’s debt is triple ours as a % of its GDP, it’s been downgraded below Botswana, and has been instantly selling its securities at near 0 rates for over 10 years.

Turkey has run inflation rates of over 100%, has had a currency that was dropping at over 50% annually, and had no trouble selling quadrillions of lira securities when no one had calculators that even went up that high.

Clearly selling govt securities for non convertible currency with a floating exchange rate policy has nothing to do with ‘solvency’ nor is solvency an issue.

A credit score in local currency is inapplicable.

More important, the govt deficit EQUALS (by identity- national income accounting) to total net savings of financial assets of all the non govt. sectors.

So the larger the deficit the larger the savings outside of govt, because that’s where all net savings of financial assets comes from.

Today, govt. spending is nothing more than an entry on its own spreadsheet. That is the ONLY way govt. funds are ever spent.

Get over it and move on!

Warren Mosler
http://www.moslereconomics.com

]]> By: Uncle Sam’s Credit Score - the aftermath http://www.creditloan.com/blog/2009/01/05/uncle-sams-credit-score/#comment-527 Uncle Sam’s Credit Score - the aftermath Fri, 09 Jan 2009 18:30:55 +0000 http://www.creditloan.com/blog/?p=194#comment-527 [...] January 9, 2009 · No Comments Looks like America could qualify for a Discover Card. [...] [...] January 9, 2009 · No Comments Looks like America could qualify for a Discover Card. [...]

]]> By: threedonia.com » Blog Archive » Credit Risk http://www.creditloan.com/blog/2009/01/05/uncle-sams-credit-score/#comment-526 threedonia.com » Blog Archive » Credit Risk Fri, 09 Jan 2009 17:32:46 +0000 http://www.creditloan.com/blog/?p=194#comment-526 [...] I’m not sure if I’m pleased or troubled at having a better FICO score than the U.S. government. [...] [...] I’m not sure if I’m pleased or troubled at having a better FICO score than the U.S. government. [...]

]]> By: Drew http://www.creditloan.com/blog/2009/01/05/uncle-sams-credit-score/#comment-524 Drew Fri, 09 Jan 2009 15:03:41 +0000 http://www.creditloan.com/blog/?p=194#comment-524 Awesome! Seeing this score at other points in time would add to the fun. (1776, 1790, 1830, 1860, 1920, 1941, 1950, 1980, etc.) Awesome! Seeing this score at other points in time would add to the fun. (1776, 1790, 1830, 1860, 1920, 1941, 1950, 1980, etc.)

]]> By: Robert Arvanitis http://www.creditloan.com/blog/2009/01/05/uncle-sams-credit-score/#comment-521 Robert Arvanitis Fri, 09 Jan 2009 14:16:19 +0000 http://www.creditloan.com/blog/?p=194#comment-521 Insta-Pundit notes that the US rating has an extra rating category not available to ordinary borrowers -- "Can take money at gunpoint." That's the ticket. Insta-Pundit notes that the US rating has an extra rating category not available to ordinary borrowers — “Can take money at gunpoint.” That’s the ticket.

]]> By: jimbo http://www.creditloan.com/blog/2009/01/05/uncle-sams-credit-score/#comment-520 jimbo Fri, 09 Jan 2009 13:43:03 +0000 http://www.creditloan.com/blog/?p=194#comment-520 I realize this is a joke, but you do realize how nonsensical it is, right? Right? I mean, right up there when you say, "it can print money to meet it's need, devaluing it in the process" you do realize that that's not what happens, right? That "printing money" (or what is understood as such) does not and cannot happen in a modern floating exchange rate regime? I'd recommend a remedial course in reserve accounting, if I thought it would do any good. Short of that, try this: http://www.moslereconomics.com/mandatory-readings/soft-currency-economics/ I realize this is a joke, but you do realize how nonsensical it is, right? Right?

I mean, right up there when you say, “it can print money to meet it’s need, devaluing it in the process” you do realize that that’s not what happens, right? That “printing money” (or what is understood as such) does not and cannot happen in a modern floating exchange rate regime?

I’d recommend a remedial course in reserve accounting, if I thought it would do any good. Short of that, try this:

http://www.moslereconomics.com/mandatory-readings/soft-currency-economics/

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