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U.S. Stripped of AAA Credit Rating...By China?!
By Dian L. Chu, Economic Forecasts & Opinions
Despite repeated warnings going back several years from Moody's, S&P et al that the U.S. could lose its top credit rating with ongoing fiscal deficits and heavy debts, the platinum-plated AAA rating of the United States seems all untouchable.
The top notch rating certainly has helped with continuing debt financing and bolstered the confidence of some government officials. Secretary Geithner, for example, said in a February interview that the U.S. government "will never" lose its credit rating, despite big budget deficits and a newly raised debt ceiling of $14.3 trillion.
Along came a Beijing-based rating agency--Dagong International Credit Rating Co. (????????????.) Its first order of business is to downgrade sovereign debt ratings on some major Western nations, while slamming its Western counterparts.
"The reason for the global financial crisis and debt crisis in Europe is that the current international credit rating system does not correctly reveal the debtor's repayment ability."
Dubbed as the world’s first “non-Western” sovereign credit rating agency, in its debut international report, Dagone (means Big Justice in Chinese) downshifted the US to AA with a negative outlook, while UK and France were given AA-; Belgium, Spain, Italy with A-.
It also rates debt risk of the US above China, and listed the US as one of the countries with exposure to increasing borrowing costs and default risks.
In June, the total US debt topped $13 trillion for the first time in history. The International Monetary Fund (IMF) projected that the U.S. deficit will stand at 64% of GDP this year, rising to just over 96% by 2020.
Concerned that high unemployment may force a double dip recession, the IMF--just last week--urged the United States to rein in its budget deficit.
Some see Dagong’s report as mere political propaganda by Beijing to counter the repeated pressure by the U.S. on its yuan policy. Nevertheless, the national debt by country chart (below) should say that Dagong's assessment is not entirely baseless, regardless of any possible hidden agenda.
Source: Visualeconomics.com
Meanwhile, the flock to the U.S. treasury in recent months due to the European debt crisis--temporary in nature—is by no means a testament to America’s credit worthiness.
This downgrade, although might not carry much weight and influence on the bond market, does give a sobering glimpse into the unthinkable……, well, at least to Geithner.
“Perceptions of a large U.S. borrowing capacity are misleading.” ~ Alan Greenspan
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india 78% indebted....i just wonder who owns the major portion of this debt....
i just hope not those Bankers and the Queen of England....we all can see where this DEBT game is heading.....these people will ask for land of the nations and the people will be left with nothing.........just like Greece is being forced to sell off assets...
where did you get that?
India's net debt is 122 billion dollars whereas it has 301 billion in reserves[Economist Jun 2010]
Deficit is reducing to 4% GDP this year after a bumper 3G spectrum auction- 4%
Monsoon is better this year, so add 2% to GDP which is >10% growth YOY
India looks like AAAAA in comparison to others
I would BANK on China.................their TIGHT.
while the us used it's credit agencies to deflect attention away from it's own paper to europe's , who would have thought that china and not europe would be the first to bite back?
the kitchen may be getting hotter sooner than expected.
Downgrade China to Busted Ponzi Slave Labor Camp
6 (junk)s for Trav for telling it like it is?!
Jeez!
+1 Trav
This just in: Mars has downgraded Earth to A-.
My god, can they do that? It's an outrage. I suggest we sanction the shit out of them.
Sorry couldn't resist that either.
Hahhahhhahahahahhhahahahaahahahhahahaahahhhahahahhhhaha
Better get your gold now bitches
Sorry couldn't resist
8.68 Trillion is an old figure the current amount is 13 Trillion as well the chart does not reflect the unfunded liabilites which for the US is 109 Trillion. The chart is not truly acurate unless the unfunded liabilites are include for each country as well.
http://www.usdebtclock.org/.
Those UNFUNDED liabilities are nothing more than PONZI schemes. The US government is running the world's largest financial scam in the history of the known world. All honest rating agencies must downgrade USA and not fear all the threats of 'Arkancide'.
Finally, a rating agency with some balls to tell it like it is.
Sorry, but I just don't buy it. This rating agency's balls are in a jar that is in the posession of the Chinese goverment. China, being touted non-democratic, will not all of a sudden allow it's slightly liberalized arm (just read the About Us statement) to start speaking interesting things about it's biggest trade partner and mortal enemy/friend.
Nope, this is clearly Beijing speaking. The question that stands is: is this just a one-time delayed response to the 'currency manipulator' accusations, or is China sending some message to the US. What message? Oh, I don't know, just take your pick - from the sobering 'get your fiscal shit together' to the less obvious 'stop phucking things up in the Middle East'.
What say you?
Beijing: "Change the condom already!"
Ah, I get it.
Ribbed, for the taxpayers pleasure.
Moodys, et al are just an extension of the US financial establishment. They will *never* downgrade our credit rating unless/until it is completely agreed to and then orchestrated by the Fed, etc. Why these agencies still exist after the housing disaster is beyond me.
What's the point of having ratings agencies, GDP and econ stats in general when they are all adjusted by the whim of whatever government hedonically wishes them to be? It's not like anybody actually trust in or believes the present political climate anyway. The COMEX metals market is a sham. The DOW and most of the indexes are "secret shoppered" on the floor by the PPT.
There's John William's www.shadowstats.com and then there are all the rest.
If it ain't precious metals I ain't interested... I'm tired of "picking up nickels in front of speeding freight trains!"
I will destroy them all!
"Hello Morbo, how's the family?"
Morbo: "Belligerent and numerous!"
LOL! Kittens still give me gas...
rating agencies, auditors are all enforcers of Ponzi
Too much to lose just for the sake of honesty & integrity
As an auditor, I try not to enforce Ponzi. But I have to admit it is hard amongst my peers who generally fall into two categories:
1) paycheck to paycheck dependent sheep
2) those in bed with the bad guys
This is the best thing that could happen. The drunken sailors in Washington need to know that the party won't last forever.
We (U.S.) need our bottle of milk taken away. It might hurt, but in the long run, it's the best thing for us.
I know this Credit Rating Agency isn't a big name, but they are setting out to spark something. Let's see how much effect it has.
Crap! and an MSG head-ache from the flied lice as well.
China sees US accusations of currency manipulation and raises "balls across the nose."
8.68 Trillion. Hey look we are winning. The U.S. is always number one.
Well at least there is 1 realistic rating out there..actually still probably too generous. Wonder what the US map would look like if they did it by state?
+1
Yellow Danger Robinsons! Yellow Danger!
I bet Benny B. is on the phone right now with Bad Moody to lower the China ratings by a 1000 points AS WE SPEAK!