subject: Satori Group – Sovereign AAA Ratings No Longer Assured [print this page] "Satori Group" analysts have told clients that the challenges faced by the biggest "AAA"-rated developed nations could pose threats to the value of their investments if they fail to plan effectively.
A report by Moody's, the credit ratings agency, says that these countries are facing the very real prospect of losing their revered AAA ratings as their debts approach 100% of annual GDP and their tax bases shrink.
As aging populations in developed nations grow, they will undoubtedly place a greater strain on tax bases in decline. "Young people will not welcome having to pay more taxes in order to support the old but unless nations undergo pension reform", said Paul Phares head of corporate trading at "Satori Group".
The threat posed to investments revolve around the higher yields that investors may demand in order to hold the sovereign debt of nations perceived to be at risk of default. "Satori Group" believes that central banks in countries able to print their own currencies will do so in order to buy the debt issued by their governments. The effect would undoubtedly be devaluation of the currencies and a loss of purchasing power of money.
"Satori Group" suggests that clients hold precious metals as a hedge against the stealth devaluation and inflation that these policies may cause.
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Satori Group Sovereign AAA Ratings No Longer Assured
