If 600,000 monthly job losses, a prolonged housing depression, insolvent banks, and a pending GM bankruptcy are not enough to slow down this completely ridiculous stock rally, at least we finally know what will get Wall St.'s attention, the credit rating of the United States.
On Thursday credit agency Standard & Poor's cut Britain's credit outlook to negative for the first time ever. And while they didn't go as far as actually cutting their credit rating from the AAA, many on Wall St., rightfully so, got the clue that the US could be next to be warned.
Now, while Standard & Poor's is no longer as credible as they once were several months ago, before the credit crisis, and while they may never actually downgrade the UK for fear that it would only further complicate Britain's economic crisis, the warning is clearly something that Washington needs to acknowledge; stop spending and printing money in the name of "stimulus".
What is so preposterous about all of this credit rating talk is not that the UK or the US would ever default on their debt because they can simply print more money, but what is more alarming is how much money they would need to print in order to satisfy their ongoing debt obligations and how this would impact inflation. As I have written about before, it appears that Washington is not only not worried about future inflation, they may actually embrace it. Inflation is the ultimate equalizer for savers and debtors.