Skip to comments.Chinese agency cuts U.S. debt rating again
Posted on 08/02/2011 10:51:36 PM PDT by george76
Chinese credit-rating agency Dagong Global Credit Rating Co. again downgraded U.S. sovereign debt Wednesday and warned of further downgrades, the state-run Xinhua news agency reported....
Dagong cut U.S. Treasurys to A from A+, with a negative outlook, saying growth in U.S. debt is still outpacing revenue growth. The latest move followed a Dongang downgrade of U.S. debt from AA to A+ in November, citing the launch of the Federal Reserve's second round of quantitative easing.
"The agency said the approval to raise the debt ceiling indicated that there will not be any positive changes in factors that will influence the country's debt-paying ability in the long run,"
The news came the same day as a Xinhua editorial said the U.S. had failed to defuse its debt bomb.
(Excerpt) Read more at marketwatch.com ...
If the Chinese stop buying our bonds, we are in deep do.
The US will have to print more money, which will devalue the dollar, and before u know it a dollar won’t buy squat.
Should have made the cuts.
Asia is tanking
It’s looking more and more like we will all go together.
I never thought I’d see the day when China would see the U.S. more clearly than our own leaders.
This is embarrassing.
Damn our pretending leaders.
Where is this money going to come from...the Fed? The same Fed who is talking QE3?
We are going down hard folks.
If the Chinese stop buying our bonds, we are in deep do.
If the Chinese stop buying our bonds, they are in deep do.
If the yuan goes up,
they will get what I call ‘Japan disease’.
with deflation stagnation, and unemployment.
as it is,
the only thing keeping china going now,
is construction of useless ghost cities.
They are in over their heads,
But so are we.
Gold is going to 1700
The Chinese can’t stop buying our bonds unless they decide to stop selling things to us. It’s an empty threat from a country that doesn’t have its own bond market.
You know what bugs me?
The next step is war.
I dont think they can project military power to our hemisphere. but they aint Liking this ****
So - which makes a bigger impact - The Chinese, or Moody’s?
Who else, other than China even has the $ to buy our junk bonds? From recent reports - Europe is about to be totally bankrupt (Hey Europe - how’s that Muzzy-loving, one-currency, European Union join’ for you?).
Who does that leave? India? Russia? Venezuela? Brazil? This may sound naive - but who out there is willing to write a check to the USA for $2 Trillion? For that matter - who has that kind of solvent resources to even think about it? The Chinese?
It aint gonna be Moodys
LoL! I hate to laugh at that, but that’s what it looks like.
Bernake is gonna print a bunch of money, and inflation is going to kick in.
This is not going to end well
Meanwhile the chinese will sell less crap because we will tighten our belts.
The chinese are over leveraged.
We’ll see who survives this goat rope.
No. It’s U.G.L.Y.
We have food, gold, silver...inflation already.
Ben Bernack is printing more money and buying Treasuries thru Goldman Sachs which is killing CD’s and other money market instruments
So where is money to be made other that commodities?
China is said to be purchasing an aircraft carrier. Carriers aren’t defensive weapons, they are for projecting power. If China starts building a blue water navy the halfwits we elect to office had better start paying attention.
Gold went up $40 an oz today
Over the past year and a half the Chinese have reduced their holdings of US treasuries by nearly 60%.
They still hold more than anyone else, but they have seen trouble coming and reduced their exposure.
The second big problem with a rating downgrade is that the interest rate will have to be raised in order to sell new issue bonds. It won't take too much to get to a point where we can't pay the interest AND meet the rest of the Federal obligations, let alone retire the principal on any bonds. Then we're done.
India has 3 carriers in the works.
They should have 2 afloat shortly
Lord I hope they are decent people. Half of them are commies and a further 1/4 are nuts, but a further 1/4 are like us.
“So - which makes a bigger impact - The Chinese, or Moodys?”
The bond Vigilantes. They’ll buy our bonds but only at a higher interest rate.
” This may sound naive - but who out there is willing to write a check to the USA for $2 Trillion?”
That’s not naive at all. Some very sharp analysts have already been warning that the amount of money that the US will need to borrow is going to exceed the world’s available savings.
other that commodities?
Best to not lose money by standing on the sidelines for now ?
“They still hold more than anyone else, “
Actually they aren’t the largest holder of our bonds, they are something like 5th on the list. Britain and Japan are ahead of them, as are American insurance companies.
I dont know.
I feel like inflation is coming
I wouldn’t worry about India’s carriers. But I’m certain that China does.
Theirs is crap
“I feel like inflation is coming”
Coming??? What planet are you living on, because it’s already HERE on this one.
Been to grocery lately?
Longer term bonds will get punished when the money printing fails. Stock markets seem high [ which presents the contrary opportunity } with low volume recently.
“Over the past year and a half the Chinese have reduced their holdings of US treasuries by nearly 60%.”
That sounds like QE2. We bought their U.S. treasuries back with printed money. Maybe downgrade came when the Chinese felt the wet ink on the Fed banknotes.
You are correct, I'm tryin' to do the math in my head while going from tab to tab. I'll learn to copy and paste, juxtaposed on Wordpad.
some of this stuff is hard to believe.
US 10 year bond, yield is 2,58 percent.
don’t believe me?
Unfortunately, we don't know exactly what the Fed does with Quantitative Easing currency creation, they have been able to defeat Congress' demands for transparency.
Additionally I failed to note (poor math), the the Chinese sale of bonds likely went to the foreign nations that now hold more than China.
This means there is less chance that an accomplished QE currency creation has gone for US Treasury Bonds. The danger is that the Fed will do this in the future.
They don’t. They, of course, rank China bonds AAA.
Same old ****, different day.
Compared to the stock market which has returned over the last 11 years a total of .2 percent? That’s a princely sum.
Yeah, Obama’s going to have to dip into his stash to keep it above 10k. We’re going down folks!
Market peak in Oct of ‘07 still the high point, close to 4 years later. Only period that was longer was the recession from ‘00 to ‘06, where it took 6 years to fully recover.
Downgrading our credit rating isn’t a blind man’s move these days.
Perhaps China is wrong to rate their’s AAA. I still don’t see our credit rating to be good.
With the Obama/Geitner Comedy team in charge, this is a circus.
I appreciate your response though. I doubt you see us as a great bet today either. Raising the debt ceiling once again, this simply cannot go on. Today, tomorrow, ten years from now, we’re going to wind up in a world of hurt.
Market from 1965 to 1982 was essentially flat. So that’s the last time we had such a long period where the DOW didn’t climb.
DOW in 1965 was 910 and was 884 in 1982. So that’s 17 years. This downturn has already lasted 11, going on 12 years now.
Great depression was 1929 to 1954, so 25 years. :(