#AceDebtNews – the US has lied about their debt since 2008, when they were so desperate they climbed into bed with the Chinese ,who duly bailed them out! They then duly missed a quarterly payment, but the Chinese gave them one chance, this down-grade is a warning, not to get so close to the wire and not have money to pay them next quarter! #debt #lies
It turns out that increasing the debt is the problem, not the solution.
A Chinese ratings agency downgraded its US sovereign credit rating Thursday despite Washington’s resolution of the debt ceiling deadlock, warning that fundamentals for a potential default remained “unchanged”.
Dagong lowered its ratings for US local and foreign currency credit from A to A-, maintaining a negative outlook, the agency said in a statement.
The announcement came after the US Congress passed and President Barack Obama signed a bill that extends the nation’s borrowing authority and ends a two-week government shutdown.
“The fundamental situation that the debt growth rate significantly outpaces that of fiscal income and gross domestic product remains unchanged,” Dagong said in the statement, adding Washington’s solvency was vulnerable as old debts were still repaid through raising new debts.
#AceDebtNews – the end of the shut-down and the end of downgrading by Fitch, but the Chinese still want to make a point, right between Obama’s ribs!
This was picked up at Fitch – Investment and debt are closely connected and Fitch believes China has a debt problem to match its extraordinarily high investment rate. The stock of debt in China’s economy has surged to around 200% of GDP at end-2012 from 129% at end-2008 when the authorities unleashed a credit-fuelled stimulus. The agency believes no economy can operate indefinitely with a rising leverage ratio – another reason why growth is on an unsustainable path. More at this link: http://www.fitchratings.com/creditdesk/press_releases/detail.cfm?pr_id=805012&origin=home&cm_sp=homepage-_-Featured_Content_Archive-_-Rebalancing%20Central%20for%20China’s%20Sovereign%20Ratings #debt