U.S. Sovereign Credit Rating Downgraded Again By China's Dagong
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Chinese rating agency Dagong is at it again. Today the rogue credit rating agency downgraded local and foreign currency long term sovereign credit rating of the United States from "AA" to "A+".
The firm's downgrade reflects the U.S.'s "deteriorating debt repayment capability and drastic decline of the government’s intention of debt repayment."
Dagong said the serious defects in the United States economic development and management model will lead to the long-term recession of its national economy, fundamentally lowering the national solvency.
Commenting on QE2, Dagong said, "the new round of quantitative easing monetary policy adopted by the Federal Reserve has brought about an obvious trend of depreciation of the U.S. dollar, and the continuation and deepening of credit crisis in the U.S. Such a move entirely encroaches on the interests of the creditors, indicating the decline of the U.S. government's intention of debt repayment."
The crisis cannot be resolved through currency depreciation, the firm states.
"On the contrary, it is likely that an overall crisis might be triggered by the U.S. government's policy to continuously depreciate the U.S. dollar against the will of creditors."
Dagong was recently rejected in its bid to become an officially recognized bond rating firm in the U.S., so maybe there are some hard feelings their.
The firm's downgrade reflects the U.S.'s "deteriorating debt repayment capability and drastic decline of the government’s intention of debt repayment."
Dagong said the serious defects in the United States economic development and management model will lead to the long-term recession of its national economy, fundamentally lowering the national solvency.
Commenting on QE2, Dagong said, "the new round of quantitative easing monetary policy adopted by the Federal Reserve has brought about an obvious trend of depreciation of the U.S. dollar, and the continuation and deepening of credit crisis in the U.S. Such a move entirely encroaches on the interests of the creditors, indicating the decline of the U.S. government's intention of debt repayment."
The crisis cannot be resolved through currency depreciation, the firm states.
"On the contrary, it is likely that an overall crisis might be triggered by the U.S. government's policy to continuously depreciate the U.S. dollar against the will of creditors."
Dagong was recently rejected in its bid to become an officially recognized bond rating firm in the U.S., so maybe there are some hard feelings their.
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