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China credit agency downgrades US debt

August 4, 2011

Although the United States narrowly avoided an unprecedented default following congressional approval of a last-minute compromise plan to raise the debt ceiling, China’s leading credit rating agency Wednesday downgraded U.S. sovereign debt after putting it on negative watch last month.

The Dagong Global Credit Rating Company, which lowered the United States to A+ last November after the U.S. Federal Reserve decided to continue loosening its monetary policy, announced a further downgrade to A, indicating heightened doubts over Washington’s long-term ability to repay its debts.

It said the gloomy assessment — much lower than the AAA ratings given by the so-called “big three” Western agencies Moody’s, Fitch, and Standard and Poor’s — was inevitable given the level of market concern generated by the stalemate between Democrats and Republicans over the debt ceiling.

“The squabbling between the two political parties on raising the U.S. debt ceiling reflected an irreversible trend on the United States’ declining ability to repay its debts,” Dagong Chairman Guan Jianzhong told CNN.

“The two parties acted in a very irresponsible way and their actions greatly exposed the negative impact of the U.S. political system on its economic fundamentals,” he said.

Ironically, Dagong’s move could hurt not just the United States but also China, the largest foreign owner of U.S. debt with holdings worth almost $1.2 trillion.

“Our downgrade simply reflects reality,” Guan said. “Our rating didn’t cause China to lose any money — it was the inappropriately high ratings for the U.S. by Western agencies that had led China to make risky investments in U.S. debt.”

Observers say China, whose foreign exchange reserves now stand at $3.2 trillion, has had little choice but to buy U.S. Treasury bonds.

“There aren’t that many other markets that are as deep or as liquid as treasuries,” said Patrick Chovanec, an economic analyst with Tsinghua University in Beijing. “When they accumulate reserves, this is the only place they can put them.”

The privately held Dagong, founded in 1994 to rate Chinese companies, attracted worldwide attention last July when it published its first sovereign credit ratings and, citing growing deficits in the developed world, ranked China higher than the United States and Japan.

Dagong now rates 67 countries and aims to more than double the number by the end of this year. Its ambition to become an alternative to the “big three” suffered a setback, however, when the U.S. Securities and Exchange Commission refused to recognize its rating because of the commission’s inability to supervise the Beijing-based agency.

Guan, who worked as a civil servant and a Wall Street accountant before taking the helm at Dagong, is quick to defend his firm’s independence and objectivity. He points to what he calls Western agencies’ “double standard” in rating the U.S. and European economies to underscore the global need for a newcomer like Dagong.

“People are used to credit ratings issued by the ‘big three,’ but the financial crisis has clearly proved them wrong,” Guan said. “They can no longer shoulder the responsibility of rating the world.”

“That’s the role we are striving to play,” he added.

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  1. Paul Felix Schott permalink

    When this Old World starts getting you down. From Pollution the cost of OIL,
    Heating Fuel,The Fuel you put in your Vehicles, You Electric Bills from
    cooling air conditioners and lights not to speak of the Evil. The TAX that all
    Governments Federal, State, County and City put on everything they can thing of.
    They are supposed to serve us. Not put a burden on its people. That they are
    elected to serve all the people you, not their own Pocket Books.

    The Wicked keep putting higher taxes on everything. Making it a Heavy
    Burden on many that are already struggling just to put food on the table.
    Too many Americans have lost their home to the tax collector or to foreclosures
    from the unjust bankers greed. More are out of work and lost their homes then
    in the GREAT DEPRESSION,in the last ten years. All Americans and many Nations
    need good jobs and more of them. Not more TAXES.

    There is a Industry that will employ workers and is growing by more then 50%
    every year. There is a clear way for all up on the roof the Sun Light is free
    fuel from GOD. Some wicked in Government have been backing Coal, Oil, Gas and
    the Nuclear industries for too many years. These kickbacks to them were called
    Subsidizing Industry Technology. Most all Wise Men and smart Economist and
    Environmentalists call this padding their pockets and subsidizing back to the
    Stone Age.

    This might even been funny in the 1960?s. If it were a Fred Flintstones and
    Barny Rubble Movie. About How to aggressively systematically work with the rich
    to Pollute Ground Water quality to the point it is unsafe to drink or use.
    So to they make a law you can only buy water from their pipe line. And to make
    the air we breath full of Toxic Gases, Sulfur Dioxide and more Radioactive
    and Acid Rain. Injuring all living things on Earth.

    With Fred Flintstones to the Rescue. To help create a Healthier Environment.
    For all Future Generations. By spotlighting Renewable Energy and Free Energy
    like Wind and Solar. On his and his neighbor Barny Rubble’s roof. Even though
    the greedy wicked would do everything to stop or slow them down.

    Just imagine a dream that a 100 years ago one of the smartest man to ever
    live had. A dream after working with Sun Light. That all on Earth would use
    Free Energy Solar Energy.

    That Dream also shared by a man that dreamed this over 2,250 years ago.
    Both These men showed the world in their days. That this dream of Free Energy
    Solar Energy World wide was very possible. Both of these two wise men had
    first hand worked and researched their experiments for not just days, weeks
    put for many years.

    One of these men used chalk on Black Board the others board was a black
    stone table or floor covered with white sand and used a stick. One of these
    two Brilliant men had Kings from all most every Kingdom on Earth come to him
    for advice.

    The other went to almost every nation on Earth. Freely on his own dime
    Teaching All that had ears to hear. He would win the Nobel Prize for doing so.
    For his work on Solar Energy. Only after years of doing research and when most
    Scientist on Earth would not take the nomination for the Nobel Prize in 1921
    this Brilliant scientist was awarded it in 1922 for the 1921 year.

    Now if this was just a Pretend TV Show or a Movie from a dream. This would
    be a great Sci Fi Story Line. In the 1960?s or even better to day. Sci Fi story
    Movie or dream No.

    All that i Have told you did actually really happen. Albert Einstein won the
    Nobel Prize for what? When Government leaders asked him to go on stage. To
    address the Scientific Community and the World. About what he was given the
    Nobel Prize for. When Albert Einstein Had done so. He addressed them with his
    other accomplishments. For years most Governments did not have a ear for
    Einstein’s Dream.

    Archimedes around 250 B.C. was know most of the World over as a great
    Mathematician. One of the first Scientist and Inventor of many things. Even
    the first Laser Ray from the Sun’s Energy. Science Fiction is what you would
    have though you were seeing if you could go back in time, it was real.To day
    we call it The LASER, Light Amplification by Stimulated Emission. Back then it
    was just called Amplification of the SUN Archimedes Death Ray.

    Thousand of years later it would be a Laser. That Albert Einstein help
    make possible. That would unlock one of the first books on Earth.
    The METHOD written by Archimedes. Then over more then 250 years later. When
    well Faded was cut from a scroll and put into a book form, to be easier to
    hide from the Romans by St. Paul. This book sold for over 2 million dollars.
    In New york at Christie’s Auction House.

    These two are at the top of the list of the World’s Greatest Scientists,
    Viewed by Scientist around the World.

    Sad that for the last 25 years or so of every teacher asked no matter what
    Grade k through 16. 80% of them did not know Archimedes. Even sadder 90%
    of them could not tell you what one of the most Brilliant Scientist to ever
    live on Earth. Won the Nobel Prize for.

    It was for the work Albert Einstein did to show the World it could get
    Free Energy, Electric from the SUN. PHOTOVOLTAICS

    You ask this question to any Military general 95% of them will get it right.
    Even more surprising 99% of them will know more about Archimedes then most
    Teachers on Earth. Generals know Energy is the key to Winning.

    At almost one thousand to one Archimedes always won against what all knew was
    impossible odds. Archimedes home town city of Syracuse was victorious against the
    greatest Kingdoms Armies on earth many times. Syracuse once was one of the most
    powerful cities in the World.

    I can only ask you to please look into Solar Energy, Solar Power, Solar Panels
    and Solar array on the internet under Images. To see and explore for your self
    then you be the JURY.

    More then 10 years ago the Internet became most of the World’s Universities
    Learning Platform. A Modern Day Archimedes Resource Center.

    The Solar Energy Industry in the year 2010 has leaped ahead farther and
    faster then any other industry on Earth. The Solar Industry in the
    United States of America alone, has grown by more then 50% in 2010 and it looks
    like that number will go up even higher this year 2011.

    The strong benefits of Solar Energy is Clear Clean Air viewed in major cities
    as improving air quality. Clean Cities. By all that use there brain for good .
    View it as protecting the environment and Freedom from OIL.

    While the Federal Government has eased the Tax on Renewable Energy till the end
    of this year 2011. Some cities in the states that these Legislators come from have
    worked against these tax credits.

    By doing so they are showing their true objectives. That they have stock in some power plants and do not want to lose all that Money they have been taking out of your pocket books for too many years. By taxing you on your Energy Bills. They want to Control Power and Tax Everything they can. Not let People be free to get their own power from the top of their own roofs.

    By adding their own taxes to them. These wicked leaders think that this will take away the incentives to harvest the Free Energy from the Sun.

    The Public ability and awareness for all on Earth to use the Natural Solar Energy, is Contributing to Production of Solar Energy Products. Making the Solar Energy Industry the fastest growing on Earth. A Wealth of Free Energy From The SUN.

    The more the wicked try to slow the Solar Energy Industry down, it only Enhances
    involvement and the efforts of the Good at Heart.

    GOD Bless you for reading this.

    The Lord’s little Helper
    Paul Felix Schott

    PS
    through out History Many have tried to wipe the good from our history books.
    Read the Bible Jesus will Bless you more then i can.

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