China’s Dagong credit ratings agency is at it again, now saying the U.S. is already in default, according to the AFP. The firm said last year that the U.S. and European countries should have credit ratings below China, and announced its own rankings to back up its statements.
Their reason for default, however, is a little suspicious.
“In our opinion, the United States has already been defaulting,” Guan Jianzhong, president of Dagong Global Credit Rating Co. Ltd., the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying.
Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies — eroding the wealth of creditors including China, Guan said.
If that’s Dagong’s reason for the downgrade, doesn’t that imply that China too, frequently devaluing its currency to keep pace with the dollar, is also in default to foreign creditors?
Nevertheless, certainly adds to the current fire coming from China, in terms of the U.S. debt position.
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