Dagong has downgraded the local and foreign currency long term sovereign credit
rating of the United States of America (hereinafter referred to as “United States” ) from
“AA” to “A+“, which reflects its deteriorating debt repayment capability and drastic decline of the government’s intention of debt repayment. [!] 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.
If one of the world's leading agencies - S&P, Moody's or Fitch - would have published such a report, the market for Treasury Bills might have gone crazy. Me - and I think/hope the markets too - consider this report as a rather political move. But it sheds light on the ambiguity of the ongoing discussion about China's exchange rate policy and US monetary policy. This report probably aims to blame the FED for the continuing imbalances in both the global monetary system and in global trade. On the other hand, I wonder whether Chinese authorities are completely happy with such a harsh ajudgment upon their largest debtor. US and China are still sitting in the same boat...
