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China's Top Credit rating Agency Lowers US' Creditworthiness

  

Such a move entirely encroaches on the interests of the creditors, indicating the decline of the US government's intention of debt repayment: Chinese credit rating agency. 

 

November 13, 2010 (Hamsayeh.Net) - Top Chinese rating agency has lowered US creditworthiness to 'A' following last week announcement by Federal Reserve chairman Ben Bernanke to begin injecting an additional $600 billion out of thin air into the economy.

 

The measure was taken as a final remedy to ongoing economic stagnation gripping most western industrial nations particularly the United States since collapse of the housing bubble in 2008. On the sideline of the G20 summit in South Korea which ended without any conclusive results, the China's top credit rating agency, Dagong Global Credit Rating Co. announced it had decided to downgrade the US rating to an 'A', because of fears over incapability of the US to repay its debts to foreign investors particularly China.

 

China is world's biggest holder of US treasury bills.  '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,'  a report by the agency indicated. It added that the new round of printing unsupported dollars known as quantitative easing number 2, adopted by the US Federal Reserve reflects the dangerous depreciation of dollar which simply erases US debt payments to big debtors including China.

 

'Such a move entirely encroaches on the interests of the creditors, indicating the decline of the US government's intention of debt repayment.' Dagong Agency said. In addition to China many European countries also criticized US move to lower the value of dollar. 

 

The Obama administration has high hopes that lower dollar will make American manufactured goods cheaper as compared to other competitors. More exports should help create more jobs for millions of unemployed workers inside the US.

 

 

 

 

 

 

US has labeled China as a currency manipulator.

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