China Ratings Agency Downgrades US Debt From Moody's, S&P's, and Fitch's AAA Rating

[Joanne98]

Currency wars. Well at least a Phony War for now. See, nothing has happened. All is well. Move along. Nothing to see here. Status quo intact.

The US sovereign debt gets a stiff downgrade, cut down from number one in the world, to a distant thirteenth place. Governments like China do not take actions like this randomly, and their quasi-state organizations do not march to the beat of their own drummer. It will be interesting to watch this develop, and calculate the strategy, to figure out the next steps.

From a thematic perspective, coming up, competitive devaluations, and a shift in the reserve currency regime that will resemble a seismic shift, most likely pivoting around the SDR composition discussions later this year.

The US battered the euro and has been sitting on gold and silver ahead of the SDR discussions. And now China has slipped a shiv between the ribs of the almighty Dollar. This is just the overture, the prelude to the dance.

And trade wars, well, at least trade wars more overt than the ones which have been ongoing since 1980, in which the US based multinationals thought they were pulling the strings, breaking the back of American labor.


http://jessescrossroadscafe.blogspot.com/2010/07/china-ratings-agency-downgrades-us-debt.html

[bossy22]

1. wow....what a terrible peice of economic reporting

though the article sounds more like an op-ed to me. Who is suprised that a quasi-chinese government owned credit rating agency rated their country's debt safer? anyone? The problem is the facts stand in the way of their assertion. The U.S. has been enjoying an ever decreasing interest rate for financing their debt, inflation is kept stable, and the big 3 rating firms (which still have much more clout than this chinese firm) still call U.S. debt the safest in the world. The author asserts that the U.S. media is going to downplay it- LIKE THEY SHOULD. this is nothing more than propoganda

I will also note that the author seems to put much stock in the SDR replacing the dollar as reserve currency; and that this change is coming soon. I will now turn your attention to the head of the IMF (which controls the SDR) who says that they are a long way off from replacing the dollar http://economictimes.indiatimes.com/news/international-business/IMF-chief-sees-risks-from-surge-in-capital-flows/articleshow/6158647.cms

[dkf]

2. This is obviously for their own investment use.

Why shouldn't they be able to do their own assessment of our situation?

[bossy22]

3. they should be allowed too

im not complaining about that, but this is obviously not for their own investment use. This is due to pressure by the U.S. on china currency manipulation. It would have more weight if the markets agreed but it just so happens the opposite is being seen. What i have more of a problem with is the authors thoughts and opinions he asserts as if they are facts...even though their is very little evidence to support such assertion