Markets have been saying Greek debt has been junk for several weeks. Once again the rating agencies are the last to wake up.

Chip Hanlon and I have written about Greek debt hitting the skids.

While the world watched and learned yesterday that Goldman Sachs just can't understand that it's unethical/illegal to have someone create a product in which the creator intends to sell short and not disclose that fact to investors, the real story was occurring over in Euro land.

Right on cue Standard and Poor's lowered Greek debt to junk status-hello, please send a wakeup call to Moody's--, while cutting Portugal's debt two notches to A- from A+. That's a step in the right direction for the Credit Rating Agencies but they are still far behind the curve.

But just like the sub-prime mortgage crisis was supposed to be contained, we are now being told that there is no systemic risk emanating from the problems in the Euro Zone. Are Greece and Portugal too big to fail? What about the systemic risk of all those entities that are holding European debt? Can the V shaped global recovery continue despite the risk of a domino effect in sovereign debt default?

Maybe the global recovery can last a bit longer. But the U.S. faces a sovereign debt crisis of its own in the near future. We are the biggest debtor nation the planet has ever seen. And we have rolled over those $8.4 trillion in obligations to the very short end of the yield curve. For example, the average maturity of our debt is just 5 years. Compare that to the U.K., which has an average maturity of 19 years.

I've said and written many times before that what we have done with our nation's debt is to set up the largest sub-prime adjustable rate mortgage crisis in history. Our debt must be rolled over much more frequently because of the decision to borrow from the short end of the yield curve. We benefit in the short term by borrowing at cheap interest rates but the long term picture is bleak. Debt service payments are only manageable because of those low rates. However, the U.S. debt market will soon become overwhelmed by inflation and supply concerns. Higher interest rates will cause interest expenses to reach unaffordable levels. The decision will then have to be made by the Fed and administration if the government will allow an economic collapse to occur or if they will print money to purchase our debt and keep rates from rising (hint: that's a very bad idea).

Michael Pento Senior Market Strategist Delta Global Advisors, Inc. Toll-free: 866-772-1198 Fax: 714-841-8775 My weekly podcast: Mid-Week Reality Check