A recent article in the Financial Times quotes the head of China’s biggest credit rating agency has said that the US is insolvent and U.S. credit ratings are a joke.
“The western rating agencies are politicised and highly ideological and they do not adhere to objective standards,” Guan Jianzhong, chairman of Dagong Global Credit Rating, told the Financial Times in an interview. “China is the biggest creditor nation in the world and with the rise and national rejuvenation of China we should have our say in how the credit risks of states are judged.”
Mr. Guan also laid blame on the credit rating agencies for the financial crisis which was caused by the rating agencies. Their lack of disclosure “brought the entire US financial system to the verge of collapse, causing huge damage to the US and its strategic interests,” said Guan.
Mr. Guan aslo went on to declare that the US is basically broke: “The US is insolvent and faces bankruptcy as a pure debtor nation but the rating agencies still give it high rankings ,” Mr Guan said. “Actually, the huge military expenditure of the US is not created by themselves but comes from borrowed money, which is not sustainable.”
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