Tuesday, August 21, 2012
Free Economic Inquiry Under Attack Worldwide
Freedom of speech regarding debt, economics and national solvency is under international assault.
Here's a great overview of the situation in Europe. If you recall, independent ratings agencies (like Fitch) evaluate the quality of debt. Using that rating, central banks, insurance companies, pensions and other organizations make investment decisions based on that rating. These agencies, using tried and true methods, are downgrading debt (there's too much of it and not enough growth, making payback less likely) and this is upsetting people.
For example, Italian police raided the office of a rating agency that downgraded Italian on a minor pretext (that story is in article link above).
The European Central Bank is also contemplating rating the quality of its own debt and is making noises about limiting the ability of others to comment on the bank's solvency.
In America, Egan Jones (a mid-sized rating firm) was lowered its ratings on American debt. Immediately following this downgrade, the SEC coincidentally(?) started a harsh investigation of Egan Jones based on a minor technicality and threatened to revoke its ability to issue ratings on government debt.
Not government debt per se, but on the subject of free commentary on economics:
In Argentina, the government has threatened to exorbitantly fine economists who question official inflation numbers.
Read the articles and decide what this means for yourself.