AAA Credit Rating Not All That Critical

Standard & Poor's is a significant (but not infallible) credit rating agency designated as a nationally recognized statistical rating organization by the U.S. Securities and Exchange Commission.

The company traces its history back to 1860; however, it should be noted that it really did not become a comprehensive rating agency until much later. Although purported to be politically and fiscally neutral it is not without critics. Several antitrust lawsuits have resulted, the results of which are far too complicated for such a short newsletter; nevertheless, it is appropriate to mention that many of its best clients are banks which in the long run profit from higher interest rates brought on by a revised S&P rating.

Congress and the Obama Administration, I feel missed the mark by setting a lower debt ceiling limit. Balancing the budget is one thing, drying up stimulus money, even fiat money, is precisely what we should not be doing at this time. (That may come as a shock to some of my fellow Republicans)

Once the gold and silver standards were trounced out in our political system, the decision was make during the Nixon administration to consider the worth of our money to be based on our own capacity as a nation to produce and exert national and international power. This so-called fiat money is now our standard for currency value. Since then all reserve currencies have been fiat currencies, including the dollar and the euro.

For example, if America were made out of cheese, then the availability of cheese would be the basis for the worth of our currency. America is not make of cheese, however, so we base our currency worth on our national strength to exert power economically and politically, including physically if necessary. Those are the hard facts of reality. Color our national and international policies any color you wish, but the oil fields of Iraq and Libya are prime examples of where we feel our national interest lies—as opposed to the economically insignificant Assad régime in Syria.

Now, what is a stake in all of this political and economic uncertainty? Well, need I say, ‘our entire economic and political structure’? So, the question arises, do we not place ourselves at risk by funneling more fiat money into the economy as a stimulus? Yes, if we exceed the worth of labor and material that goes into the projects. That then become a real problem. Some of the things that we should be concerned about that will definitely deflate the worth of stimulus activity is graft, over pricing, non-revenue producing projects like bridges to nowhere, or subsidized airports out in the middle of Podunk Hollow. Those things are a waste of money, even fiat money. However, if stimulus projects are sound and add to our national worth then I say, ‘Go for it!’

And, by-the-way, it would not hurt to tax and circulate some of the untaxed profits of such billionaire corporations as Amazon.com which reportedly has more cash reserves than the US Government, in my opinion. They don't seem to be willing to put these liquid assets into the job market, so perhaps we should exercise our rights as a government of the people and by the people to do just that. To allow avarice and greed to deny the poor and needy who are willing to work (we are not talking about a hand out here) seem to me to be unconscionable as a Christian. The book of James has a few words for a policy like that.

Now, if by chance anyone is having trouble wrapping their mind around what I have just said (I am not always the clearest writer) allow me to illustrate with the following story from one of the editors at the Campaign for Liberty blogsite:

My nephew, while serving in Iraq, came upon a warehouse of Iraqi Currency with Saddam’s face all over it. He contacted me to find out what it was worth. I called several professional currency traders who confirmed my opinion that since Saddam’s Iraq was no more, neither was his fiat money. It was only worth the paper itself.

In essence fiat money is just as strong as America-no more and no less. Need I say more?

Well, 'yes' and 'no'. 'No' on the business of fiat money, but 'yes' on how this will all effect missions.

To be perfectly honest, long-term I do not know. Short-term it will continue to challenge our monetary priorities, but hopefully not our hearts. For where our money is there lies our heart.

Here's a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:

Hong Kong: $121.9 billion (0.9 percent)
Caribbean banking centers: $148.3 (1 percent)
Taiwan: $153.4 billion (1.1 percent)
Brazil: $211.4 billion (1.5 percent)
Oil exporting countries: $229.8 billion (1.6 percent)
Mutual funds: $300.5 billion (2 percent)
Commercial banks: $301.8 billion (2.1 percent)
State, local and federal retirement funds: $320.9 billion (2.2 percent)
Money market mutual funds: $337.7 billion (2.4 percent)
United Kingdom: $346.5 billion (2.4 percent)
Private pension funds: $504.7 billion (3.5 percent)
State and local governments: $506.1 billion (3.5 percent)
Japan: $912.4 billion (6.4 percent)
U.S. households: $959.4 billion (6.6 percent)
China: $1.16 trillion (8 percent)
The U.S. Treasury: $1.63 trillion (11.3 percent)
Social Security trust fund: $2.67 trillion (19 percent)

So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion.

My prayer is that we remain stable and steadfast in our commitment to missions and the work of the Kingdom.