Monday, June 05, 2006

Treasuries Turn to Junk

Standard & Poors reports that unless there are drastic changes made to public and fidcal policy, the aging global population could raise the Debt levels of the US, France, Germany, Italy, Japan and others to those normally associated with "junk" bonds.

S&P ran the simulations to highlight the overpowering impact pension and health care costs will have without further adjustment. Japan could turn into junk in 14 years whiel the Us would be expected to turn junk in 2040.

S&P assumes this data suggests most governments will be forced to reduce pensions and other benefits to avoid these scenarios.


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