Last Week, Standard and Poors downgraded the United States' debt rating. For the first time in history the United States credit rating has been downgraded from AAA to AA+. The announcement sent Wall Street into a tizzy particularly because it came on the heels of the debt ceiling debate in Washington that brought the country to the brink of its first-ever default.
The downgrade has to be 100% bad news right? Wrong, according to Dr. James Hughes, the dean of the Edward J. Bloustein School of Planning anbd Public Policy at Rutgers Univeristy in New Jersey.
Today, Hughes passed along something he'd just heard from another economist who said, "Let's have another downgrade. It just created a tremendous increase in value for U.S bonds because of the uncertainty that's been created. The paradox is; the whole world wants U.S. Treasury bonds now. It's a safe haven and part of the reason is the downgrade."
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