CHINA: USA ‘ALREADY DEFAULTING’

June 10, 2011 3:12 pm  

(Yahoo) – 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.

Foreign ministry spokesman Hong Lei on Thursday urged the United States to adopt “effective measures to improve its fiscal situation”.

Dagong has made a name for itself by hitting out at its three Western rivals, saying they caused the financial crisis by failing to properly disclose risk.

The Chinese agency, which is trying to build an international profile, has given the United States and several other nations lower marks than they received from the the big three.

Source: http://ca.news.yahoo.com/china-ratings-house-says-us-defaulting-report-054309883.html

DOW FALLS BELOW 12,000... DEVELOPING...
Real Priorities for America

Top Stories

New Indiana Poll: Cruz Up by 16 Points Over Trump (Newsmax) - A third poll was released Friday gauging Indiana voters ahead of the state's primaries on Tuesday — but this one shows Ted Cruz holding ...
Dems Panic as Union Workers Support Trump Over Hillary and Bernie... (Bizpac Review) - There’s trouble in paradise for Democrat union bosses. For GOP front-runner Donald Trump, workers affiliated with unions are a ...
Is this Obama’s Monica Lewinsky? Dear Fellow Tea Party Loyalist, I’m about to reveal something shocking to you. I really thought long and hard but I have to share it with you....
Obama Meets World Leader for a Friendly Lunch Date… Completely ... (Conservative Tribune) - President Barack Obama met with a world leader for a lunch date that was supposed to be a friendly affair, but Obama managed ...
Cruz Admits: I Won’t Get to 1,237 (CBS News) - Presidential candidate Ted Cruz said he is prepared to fight Donald Trump for the Republican presidential nomination at a contested conve...
STUDY: ‘Global warming’ has made weather better for m... (LA Times) - Since Americans first heard the term global warming in the 1970s, the weather has actually improved for most people living in the U.S. Bu...

Comments


Please help us stay spam-free. Mouse over a spam post and click the X to report spam.