China Downgrades US Credit Rating From A- To BBB+, Warns US Insolvency Would "Detonate Next Crisis"

[Han Patriot]

I think this is abit more complicated than you think, and it has little to do with China has any confidence in US economy or its capability to pay back its debt:

The main reason China buy large sum of US national bonds is: there is a deal that China buy US bond in exchange for US accept its huge trade deficts with China, thats why, despite all the loudmouths, trump can do nothing about the trade vs China.

Exactly, there is no difference is printing yuan or dollars. Once the population drops and we have less pressure to provide employment, we can divert the economy based on domestic consumption and start selling the US dollars treasury, using it as a weapon. The US$ treasury bills does nothing for our domestic economy anyway, with or without it, the Chinese economy is still growing. It is used as a shield against American economic aggression, once we reduce reliance on the American market, we can dump it and destroy their economy.

 

[soundHound]

in what regards? GDP? economy? military? foreign relations? nuclear power? UNSC member? having its currency as the world's reserve currency? constantly coming up with bigger and bigger companies (google, FB, twitter, amazon, tesla)?

ignore him, his is a parody account, with access to some martian search engine.

on topic, it aint gonna happen,I dont understand why china is downgrading it, aren't they the biggest buyer?

 

[艹艹艹]

ignore him, his is a parody account, with access to some martian search engine.

on topic, it aint gonna happen,I dont understand why china is downgrading it, aren't they the biggest buyer?

You need to increase your knowledge further

 

[lcloo]

People tend to forget history, US sub-prime financial crisis 10 years ago still has residual effect on many US middle class today.

And that is the main reason why Trump win the presidency electiion, majority of US middle income working class put their bet on Trump to reverse the deterioting real income they are facing. And check up how many times US government face the threat of closing down their administration offices in last couples of years because of shortage of funding.

They should thank China, Japan, Arabs for injecting cash into US economy via purchasing of T Bills.

Trump right now is using stick and carrots strategy on his allies (and some non-allies), to buy more weapons, taking up more financial burdens on deployment of US forces in Korea, Japan, Europe etc. And also pushing hard for investments into US from global trading partners. A sign of dire need to turn around financial deficiency in his country.

 

[Zsari]

china holds largest US debt. so the biggest loser if the US defaults on the debt is China

Which is exactly why US credit rating is very important to China and it should not rely on the US rating companies for that information.

 

[idune]

True. I just wish China stops buying it, forcing the US to balance its books. At the rate its going, we'll be spending most of tax dollars on interest payments to China. Good for China, but bad for US.

Everything has a time and place. US able to borrow infinitely because USD being used in global trade and as petro dollars. All these will change slowly but surely. Once large scale energy trade done in Yuan and in rubble, monopoly of dollars and unlimited borrowing power will take a major hit. Major trading countries in Asia already in agreement trading using their respective currencies (ASEAN -China, Iran-China, Pakistan-China, Iran-Russia ....), these will also diminish USD trade.

For China, it has $275 billion or so trade surplus a year with US, so they need to park that money somewhere or invest somewhere else. At the moment there is not enough spot to do so but soon that may change.