US Debt downgraded by Dagong Credit Agency.....again

Dagong credit agency is a new ratings group based in China. 

They use fundamentally different criteria than the other agencies.  When they first came out with their sovereign ratings, they had the US at AA vs AAA.  They now have reduced their credit rating to A+ with watch negative. 

Even though it is a private company in China, they might be under some pressure to "toe the line" of the Chinese gov't.  It seems like it is ominously being used as a sounding board for the Chinese government, but they do bring up some interesting points. 

They say that both quantitative easing and the debt, combined with lackluster growth diminish prospects of paying debt without deflating currency.  Via Dagong

The serious defects in the United States economic development and management model will lead to the long-term recession of its national economy, fundamentally lowering the national solvency. The new round of quantitative easing monetary policy adopted by the Federal Reserve has brought about an obvious trend of depreciation of the U.S. dollar, and the continuation and deepening of credit crisis in the U.S. Such a move entirely encroaches on the interests of the creditors, indicating the decline of the U.S. government’s intention of debt repayment. Analysis shows that the crisis confronting the U.S. cannot be ultimately resolved through currency depreciation. On the contrary, it is likely that an overall crisis might be triggered by the U.S. government’s policy to continuously depreciate the U.S. dollar against the will of creditors.
See the full report below as it was released by Dagong.
Usa Rating Report from Dagong

More

July 13:  US and UK downgraded for the first time and stripped of AAA rating
Reuters:  US downgraded for second time
Dagongcredit website

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