When we had gold as a regulator of debt, and the existance of derivatives nominally valued by the Bank of International Settlements at around $1 Quadrillion, and unknown total of fiduciary media floating in cyberspace was science fiction or more likely a nightmare, money had meaning and the only thing that could bring on such debt imbalances was the planned wars which profited only a very few of the smartest financiers who under wrote the wars and thereby became more powerful than governments.   Problem is now that so much money has been loaned and the advent of the computer has made is temporarily possible to substitute a massively complex illusion in place of real money.   Such illusions, even when performing trillions of computations per second can not withstand the winds of economic and financial reality, which ultimately require money to be an actual store of value and to be un-encumbered of any function that to hold value.

In the meantime,  even the agencies which were central to rating so many of the "toxic assets" as AAA via the securitization and derivatives process are now admitting that soverign debt is going to be more of a risk.   I believe they greatly under state it as they greatly over stated the value of much of what we now call "toxic assets."

Those who believe that the US is less of a risk need to see both the trees and the forrest.  Perhaps the forrest only looks pretty bad, but when you look at State Budgets, Debt and go deeper to municipalities and cities,  to see the trees, you can see that the forrest is in deeper trouble.

While the entire question of where did these entities once called "banks" get the money to pay back TARP without dropping their stock values far more than they dropped during the dillution has not been addressed, much less answered by the mainstream financial or general investigative journalism core because the new standard in journalism is "don't rock the boat,"  the question of why the US political system can not use the money it does borrow to actually make the US a much smarter economy stands.   We should be pressing not for bigger farms with more genetically modified fruits, veggies and meats in our stores, but towards smaller family farms and means by which we can cut down on the over concentration of wealth, which saps would be consumers from the ability to purchase more local products to stimulate actual wealth and spending and efficiency.  We should not be encouraging one company to try to buy up and dominate the and own patents on every food seed in the world via genetic modification but anti-trust and pro-competition measures.

The lessons of the Great Depression that we did learn and in some measure apply such as the Glass Stegal act and the anti-trust laws and the idea that if you take care of the middle class, the middle class takes care of corporate America, and the idea that competition and more evenly distributed wealth is far more efficient, stable and sustainable than ever increasing concentrations of wealth, corporate and banking power and decreasing competition and monopolization as we now see in agriculture, banking, oil, airlines, insurance, and stock brokering.

The new financial reform bill studiously exempts most of the big players and is filled with so much obfuscating complexity that it creates a snow blizzard of language while allowing the same thieves to steal off in the night and allowing them the power to obliterate our economy in my opinion.  You can read about that here at MSN market talk in a post I helped a message board friend get started:

The Root of the Financial Tsunami and A Solution: Banks Unleashed, OTC Derivatives, Phantom Money and Deregulation. – The thinking of Old and gray on the Financial Crisis

In the meantime here is the link and an excerpt from the Telegraph in the UK entitled:

Fitch warns that Britain and France risk losing their AAA rating

"…Fitch Ratings has given its bluntest warning to date that Britain and France risk losing their AAA status unless they map out a clear path to budget discipline over the next year…"

"…

Highlighting the "unpleasant fiscal arithmetic" facing states across the Old World, Fitch said that none of the "arguably" benchmark AAA states can safely rely on their top rating for much longer.

Public debt in both Britain and France will reach 90pc of GDP by 2011, higher than the 80pc (net) level when Japan lost its AAA rating earlier this decade…."

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