Standard & Poor's revise US debt outlook to 'negative'

It's not even been a week since gold broke the £900 barrier here in the UK and today sees it making new highs at £921 an ounce whilst the Dow Jones tumbled 222 points.  This comes as Standard & Poor's announced today that they are downgrading their outlook on the US's long term debt from stable to 'negative' due to the scale and indecision surrounding the nations problem.  The US retained its 'AAA' ranking, but this does raise more concerns over the nations debt problem.

"We believe there is a material risk that US policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013."  "If an agreement is not reached and meaningful implementation is not begun by then, this would in our view render the US fiscal profile meaningfully weaker than that of peer 'AAA' sovereigns."

Fortunately the Republicans (some of them at least) are starting to get the ball rolling, scalping Obama for a few cuts in exchange for averting a Government shut-down the other week.  A 2013 deadline also gives them time for another presidential election, where no doubt the issue of sovereign debt will be a hotly contested issue.  If however the US was to loose its triple A rating it would substantially increase its costs of borrowing from foreign investors, putting even more pressure on the nations already struggling finances and currency.  This is a pretty bad start to the decade for the worlds reserve currency & biggest economy.