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Chinese Rating Agency: United States Has Already Defaulted
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Chinese Rating Agency: United States Has Already Defaulted 8 Anni, 3 Mesi fa #2031

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Chinese Rating Agency: United States Has Already Defaulted

10 Jun 2011, Straits Times

A CHINESE ratings house has accused the United States of defaulting on its massive debt, state media said on Friday, a day after Beijing urged Washington to put its fiscal house in order.

'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, Mr Guan said.

Mr Guan did not immediately respond to AFP requests for comment. The US government will run out of room to spend more on August 2 unless Congress bumps up the borrowing limit beyond US$14.29 trillion (S$17.57 trillion) - but Republicans are refusing to support such a move until a deficit cutting deal is reached.

Ratings agency Fitch on Wednesday joined Moody's and Standard & Poor's to warn the United States could lose its first-class credit rating if it fails to raise its debt ceiling to avoid defaulting on loans.

A downgrade could sharply raise US borrowing costs, worsening the country's already dire fiscal position, and send shock waves through the financial world, which has long considered US debt a benchmark among safe-haven investments.

German Rating Firm Cuts US Debt To Double-A From Triple-A

German ratings agency Feri EuroRating Wednesday said it downgraded its credit rating on the U.S. to double-A from triple-A, citing the "continuing deterioration of the creditworthiness of the country due to high public debt, inadequate fiscal measures, and weaker growth prospects."

The ratings firm said U.S. deficits "are not a sustainable fiscal policy," and said it would reconsider the rating if the government "creates a long-term sustainable budget." The ratings firm, which claims about 1,000 clients worldwide, is small compared with industry peers and focuses on Germany, France and the U.K.
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