#1 "More Chinese Whine: CHINA: USA 'ALREADY DEFAULTING'"
06-10-2011, 11:29 AM
- Join Date
- Aug 2005
A Chinese ratings house has accused the United States of defaulting on its massive debt, state media said Friday, a day after Beijing urged Washington to put its fiscal house in order.
"In our opinion, the United States has already been defaulting," Guan Jianzhong, president of Dagong Global Credit Rating Co. Ltd., the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying.
Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies -- eroding the wealth of creditors including China, Guan said.
Guan did not immediately respond to AFP requests for comment.
The US government will run out of room to spend more on August 2 unless Congress bumps up the borrowing limit beyond $14.29 trillion -- but Republicans are refusing to support such a move until a deficit cutting deal is reached.
Ratings agency Fitch on Wednesday joined Moody's and Standard & Poor's to warn the United States could lose its first-class credit rating if it fails to raise its debt ceiling to avoid defaulting on loans.
A downgrade could sharply raise US borrowing costs, worsening the country's already dire fiscal position, and send shock waves through the financial world, which has long considered US debt a benchmark among safe-haven investments.
China is by far the top holder of US debt and has in the past raised worries that the massive US stimulus effort launched to revive the economy would lead to mushrooming debt that erodes the value of the dollar and its Treasury holdings.
Beijing cut its holdings of US Treasury securities for the fifth month in a row to $1.145 trillion in March, down $9.2 billion from February and 2.6 percent less than October's peak of $1.175 trillion, US data showed last month.
Last edited by megimoo; 06-10-2011 at 12:05 PM.
06-10-2011, 12:50 PM
- Join Date
- Nov 2009
- In Florda. Out smacking around Useful Idiots
Americans as a collective whole deserve this for voting in a Keynesian socialist who is clueless on economic matters.
In other news....
Triple-digit sell-off pushes Dow below 12,000
NEW YORK (CNNMoney) -- A stock sell-off gained momentum Friday, with the Dow falling below 12,000 for the first time in three months and the Nasdaq erasing all of its gains for the year.
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