Posted on 10/17/2013 8:10:26 PM PDT by TexGrill
Chinas Dagong Global Credit Rating cut its credit rating for United States debt by one notch to A-minus from A on Thursday, saying an agreement reached by Congress to raise the governments borrowing ceiling failed to address the root cause of its debt issue.
Should investors care?
In theory the answer is yes, as China is a large holder of US Treasuries. If Chinese officials were to take this downgrade seriously, they may end up trimming Chinas holdings of US Treasuries, causing a market sell off.
In practice however, the answer is no, for four reasons.
First, it is very unlikely that the average investor has ever heard that an agency called Dagong Global Credit Rating even exists. Second, a move like that would be followed by sharply lower Treasury prices, and end up hurting the countrys remaining holdings.
Third, it could sour relations between Beijing and Washington, hurting Chinese exports to the US and that could perhaps explain a big spike in gold.
(Excerpt) Read more at forbes.com ...
Those dagong Chineses is messin’ with us again!
No mention at all of what the Chinese perceive the root cause of our debt issue to be. How interesting.
So there’s a simple enough solution:
Bring American factories, back to America.
Just saying.
“Hence the government is still approaching the verge of default crisis, a situation that cannot be substantially alleviated in the foreseeable future,” it said.
http://www.france24.com/en/20131017-chinese-agency-downgrades-us-credit-rating
The only thing that matters is the ten year treasury rate. If ratings hurt rates, it costs us more.
Heck, higher yields are great for investors- except the FED LOL!
It’s about time the gov started paying investors more for the use of their hard-earned money.
But global warming is the biggest problem.(/s)
First, because the United States of America is too big to fail. Second because the United States of America is too big to fail. Third because this is obvious, and fourth, what I just said.
That just may be, but China has four or five times America’s population.
We need to start taking China seriously.
It is a massive, and increasingly strong communist powerhouse.
Bring back American factories.
Has Obama came out and blamed the tea party for this yet?
Just for the record, nobody’s too big to fail.
No Obama likes to use a face when doing his blame game. Historically, it was all Bush’s fault, but now it will be all Cruz’s fault. Barry will travel all over the world saying, “Blame Cruz.” It’s gonna be fun to watch.
With Obamacare, unions, environmental regulations, taxes, etc,etc, those factories are NEVER coming back.
I disagree.
Bring American factories, back to America.
It doesn’t seem like Forbes thinks this is a big deal but at some point China is going to start grumbling. This may be that point in time.
I'm sure the Romans felt the same way c. 200 AD.
After Oslama goal of making the USA a third world shit hole comes to fruition, that may change.
Its about time the gov started paying investors more for the use of their hard-earned money.
It only comes hard for the politically disenfranchised. The elite get all of the Federal Reserve Notes they want without earning them. At any rate, the debt's so large that a small increase in the interest rate will cause a runaway increase in total debt as larger portions of deficits get allocated to simply pay interest. The Fed admits to buying $45 billion of Treasuries a month. This month and next they need to substantially increase their buying just to cover debt rollover.
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