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

Scales Weighted in Favor of Labor Unions with New Regulation A critic of Big Labor thinks senators should keep voicing their disapproval of a controversial rule from the National Labor Relations Board. (One N...
Mo’Nique Compares Post-Oscar Career Plunge to Plight of Martin ... (Breitbart) - Actress Mo’Nique Hicks, who won an Academy Award in 2010 for her role in the film Precious and said in February she had been “blac...
Trey Gowdy Subpoenas Hillary Clinton’s Personal Emails (The Blaze) - The House Select Committee on Benghazi announced Wednesday it has sent subpoenas to former Secretary of State Hillary Clinton and the St...
Census: Minorities to Become Majority by 2020 (MRCTV) - According to a new U.S. Census Bureau report released Tuesday, more than half (50.2%) of the nation’s children are expected to be a par...
Conservative Warrior M. Stanton Evans Dead at 80 (NY Times) - M. Stanton Evans, an early leader of the conservative movement in American politics and an author of its central manifesto, the Sharon S...
Alabama Judges Ordered to Halt ‘Gay’ Weddings State's highest court: Constitution 'does not require 1 definition of marriage' (Reuters) - The Alabama Supreme Court ordered probate judges on Tue...

Comments


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