Article Image
News Link • Government Debt & Financing

China Asks For New Global Reserve Currency

The days when the debt-ridden Uncle Sam could leisurely squander unlimited overseas borrowing appeared to be numbered as its triple A-credit rating was slashed by Standard & Poor's (S&P) for the first time on Friday. Though the U.S. Treasury promptly challenged the unprecedented downgrade, many outside the United States believe the credit rating cut is an overdue bill that America has to pay for its own debt addition and the short-sighted political wrangling in Washington. Dagong Global, a fledgling Chinese rating agency, degraded the U.S. treasury bonds late last year, yet its move was met then with a sense of arrogance and cynicism from some Western commentators. Now S&P has proved what its Chinese counterpart has done is nothing but telling the global investors the ugly truth. China, the largest creditor of the world's sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China's dollar assets. To cure its addiction to debts, the United States has to reestablish the common sense principle that one should live within its means. S&P has already indicated that more credit downgrades may still follow. Thus, if no substantial cuts were made to the U.S. gigantic military expenditure and bloated social welfare costs, the downgrade would prove to be only a prelude to more devastating credit rating cuts, which will further roil the global financial markets all along the way. Moreover, the spluttering world economic recovery would be very likely to be undermined and fresh rounds of financial turmoil could come back to haunt us all. The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone. It should also stop its old practice of letting its domestic electoral politics take the global economy hostage and rely on the deep pockets of major surplus countries to make up for its perennial deficits.

1 Comments in Response to

Comment by David Jackson
Entered on:

    China wants it's investment assured by a "third party world". Why am I not at all surprised? they loaned whatever they loaned because they thought they could "buy the U.S. and whatever influence they might deem worthy. Suddenly, it "appears" that the investment might not provide the hoped-for "vig". So, instead of rolling with the unexpected shortfall of easy money and influence, they go whining to the rest of the world to shore-up their possible "losses". BS!

    They've been screwing the U.S. and the rest of the world for decades; now, it's time to suck it up and get themselves to their own "free clinic".

     Their "rating" of anything is about as worthless as that of Standard & Poor's. If they don't like us, then they ought not to do business with us. I won't miss the trade imbalances or the lead painted everything one bit. as for the decades-old middle-fingered diplomacy they've shown the U.S. and the world, RIGHT BACK AT YA'!


Join us on our Social Networks:


Share this page with your friends on your favorite social network:

Attorney For Freedom