While most of the world was looking at the S&P and the downgrade of US debt, China made a move, which is far more important towards the United States in the long run.\u00a0 Dagong Global Credit Rating, the major credit rating agency of China, downgraded US-Treasury\u2019s debt from A+ to single-A.<\/p>\n
The Dagong Global Credit Rating Agency stated \u201cThe US decision to raise the borrowing ceiling will not change the fact that the growth of its debt has outpaced its overall economic growth and fiscal revenue. \u201cIt may further erode the country\u2019s debt paying ability in the coming years.\u201d\u00a0 It also issued a negative outlook: \u201cThe rise of the US-debt ceiling helped temporarily avoid a debt default but has not improved its solvency and the increasing government debt burden will deteriorate the US sovereign debt crisis.\u201d<\/p>\n
A major Chinese news agency made another statement reflecting the sentiment of the Chinese people \u201cChina has every right to demand the US address its structural debt problems and safeguard China\u2019s dollar assets. Washington needs to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone. To cure its addiction to debts, the US has to re-establish the commonsense principle that one should live within one\u2019s means.\u201d<\/p>\n
This major move by the Chinese rating agency was hardly noticed or reported on any major news network, but its implications are far more reaching.\u00a0 China is a major holder of US debt and the statements show that the US is running out of time before China will no longer tolerate US debt and fiscal irresponsibility.\u00a0 In the long-term this has a very positive impact on gold and silver, because China will eventually be forced away from holding US debt and dollars.\u00a0 This will force them into additional asset classes and China in the past has favored both gold and silver.<\/p>\n","protected":false},"excerpt":{"rendered":"
While most of the world was looking at the S&P and the downgrade of US debt, China made a move, which is far more important towards the United States in the long run.\u00a0 Dagong Global Credit Rating, the major credit … Continue reading