Wednesday, July 14, 2010

Chinese Rating Agency Strips US of AAA Status

This is not even close to the potential cataclysmic that could result if one of the main Western rating agencies downgraded the US. Still, it is important to see how we are perceived in an area of the world we will increasingly need to borrow money from as our deficits continue to skyrocket.

"Dagong Global Credit Rating Co used its first foray into sovereign debt to paint a revolutionary picture of creditworthiness around the world, giving much greater weight to "wealth creating capacity" and foreign reserves than Fitch, Standard & Poor's, or Moody's.

The US falls to AA, while Britain and France slither down to AA-. Belgium, Spain, Italy are ranked at A- along with Malaysia.

Meanwhile, China rises to AA+ with Germany, the Netherlands and Canada, reflecting its €2.4 trillion (£2 trillion) reserves and a blistering growth rate of 8pc to 10pc a year.

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