U.S. CREDIT RATING DOWNGRADED AFTER FED PUMPS MORE MONEY

A prominent ratings firm downgraded the U.S. Government's credit rating from "AA" to "AA-" one day after the Federal Reserve announced it would pump more money into the economy by buying more than $40 billion of mortgage-backed securities per month until the economy improves. 

Ratings firm Egan-Jones said it cut its credit reating on the U.S. government because it felt the Federal Reserve's quantitative easing "would hurt the U.S. economy and the country's credit quality" by devaluing the the dollar while doing nothing to "raise the U.S.'s real gross domestic product."

The ratings firm said the Fed's action would increase the cost of commodities and reduce consumer purchasing power.

This is the second time this year Egan-Jones downgraded the U.S. government's credit rating. In April, the ratings firm downgraded America's credit rating from "AA+" to "AA" and gave the country's credit a negative outlook.

The ratings firm's pessimism then was correct, as Obama has mismanaged the country's economy like he has its foreign policy, spiraling the country into more debt and potentially taking it over the so-called fiscal cliff that looms after the November elections. 

Via: Breitbart

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US Credit Rating Cut by Egan-Jones ... Again

Ratings firm Egan-Jones cut its credit rating on the U.S. government to "AA-" from "AA," citing its opinion that quantitative easing from the Federal Reserve would hurt the U.S. economy and the country's credit quality.

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The Fed on Thursday said it would pump $40 billion into the U.S. economy each month until it saw a sustained upturn in the weak jobs market. (Read more: Fed's 'QE Infinity' — Four Things That Could Go Wrong)

In its downgrade, the firm said that issuing more currency and depressing interest rates through purchasing mortgage-backed securities does little to raise the U.S.'s realgross domestic product, but reduces the value of the dollar.

In turn, this increases the cost of commodities, which will pressure the profitability of businesses and increase the costs of consumers thereby reducing consumer purchasing power, the firm said.

In April, Egan-Jones cuts the U.S. credit rating to "AA" from "AA+" with a negative watch, citing a lack of progress in cutting the mounting federal debt.

Via: CNBC

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