Friday, June 10, 2011

Ratings agency from China says what everyone already knows

Dagong, the infamous Chinese rating agency, came out today and said what  everyone already knows but is afraid to say out loud:
  • "In our opinion, the United States has already been defaulting....Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies - eroding the wealth of creditors including China, Mr Guan said."
The Dagong announcement follows on the heels of various reports from earlier this week which are urging China to not only pull its US holdings, but to minimize its USD exposure in total.

You can read the full story about Dagong's downgrade here.

This comes just after the German credit rating agency Feri lowered its rating on US debt by a full notch, from AAA to AA.  Feri becomes the first Western agency to downgrade US government bonds!

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1 comment:

  1. So, how can a country with a pegged currency lecture the U.S. on having a floating currency?

    Isn't the real issue here that China has an artificially low currency?