AAA-Rated France May Be Vulnerable to Downgrade Following Cut to the U.S.

[sfpcjock]

Source: Bloomberg

... France is more expensive to insure against default than lower-rated governments including Malaysia, Thailand, Japan, Mexico, Czech Republic, the state of Texas and the U.S.

“France is not, in my view, a AAA country,” said Paul Donovan, London-based deputy head of global economics at UBS AG. “France can’t print its own money, a critical distinction from the U.S. It is not treated as AAA by the markets.” ...



Read more: http://www.bloomberg.com/news/2011-08-07/aaa-rated-france-may-be-vulnerable-to-downgrade-following-cut-to-the-u-s-.html

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--> I thought about this when they said France was in the AAA club on Friday. France?

[dkf]

1. And not if they are on the hook for the rest of Europe.

[Hosnon]

2. The two advantages the U.S. has are:

(1) Ability to print its own currency; and

(2) The dollar is the world's reserve currency.

#2 is the big one, in my opinion.

[sfpcjock]

3. Right

[Turborama]

5. Zimbabwe used to be able to print their own money, too.

http://en.wikipedia.org/wiki/Economy_of_Zimbabwe#Hyperinflation_2004-2009

http://en.wikipedia.org/wiki/Zimbabwean_dollar

[Hosnon]

7. Again, #2 is the big one. nt.

[Turborama]

9. At the moment. Nothing lasts forever, though...

China -- the United States' biggest creditor -- said Washington only had itself to blame for its plight and called for a new stable global reserve currency.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4950277

[Hosnon]

10. We're the US' biggest creditor. China is the largest foreign creditor.

And the only threat to our dominance as the reserve currency is the Euro, which is not exactly flexing its muscle. And China doesn't even want its currency to be the reserve.

It probably won't last forever but any change will be slow enough to not cause a shock.

[FBaggins]

11. Ah... But they couldn't print the money that denominated their debt.

That's a key difference.

[onehandle]

4. Ever been to France? Their infrastructure and quality of life is light-years ahead of ours.

When I came back from a trip to Europe not too long ago, I felt like I was coming back to a third world country.

France and others are in crisis for the same reason we are. The Banks.

[Hosnon]

8. We could afford much more were it not for Pax Americana.

Something that the rest of the world benefits from, but doesn't foot the bill for (largely).

Imagine what we could provide were the relative world peace funded by the French!

[Amonester]

6. U$B, hey?

Is he the ... ahum... HEAD of the... ahum, U$B mob?