China Downgrades U.S. Debt

On Tuesday Obama signed into law an agreement to raise the USA debt limit so we can continue borrowing money from others to run our country today.

Turns out that China, the largest buyer of U.S. debt, is less than impressed.

BEIJING: China warned Wednesday that tortured efforts to raise the US debt ceiling had failed to defuse Washington’s “debt bomb”, and that it would further diversify its currency holdings away from the dollar.


US President Barack Obama finally signed an emergency austerity bill on Tuesday that averted what would have been a catastrophic debt default for the world’s biggest economy.


But a failure to rein in US borrowing could “jeopardise the well-being of hundreds of millions of families within and beyond the US borders”, the official Xinhua news agency said in a blistering commentary on the deal.


“The months-long tug of war between Democrats and Republicans…failed to defuse Washington’s debt bomb for good, only delaying an immediate detonation by making the fuse an inch longer,” the commentary said.


Also Wednesday, Xinhua said Chinese rating agency Dagong, which has links to the government through its chairman, had downgraded the United States’ credit rating from A+ to A, with a negative outlook.


See it here; http://bigpeace.com/nmachiavelli/2011/08/03/china-obama-has-failed-to-defuse-debt-bomb-chinese-govt-downgrades-us-debt/

You have to love that word picture of the bomb going off...."only delaying an immediate detonation by making the fuse an inch longer."

Friends...this is getting serious.  It's imperative to the USA that China holds, and even buys, our IOU's.  If they start dumping them, and Russia starts dumping them, and Japan starts dumping them to rebuild the earthquake damage...then who is going to be at the auction next week when the Treasury attempts to sell $75 billion worth of IOU's?

At that point we will ONLY have the Federal Reserve "buying" our own debt....and at that point the whole unsustainable charade will quickly be revealed as a farce.

How and when will it blow up?  No one can know for sure....but it IS going to blow up.  It has to to make way for a new global currency.