The Death of the Dollar
China Slams U.S. on Credit Downgrade, Most Countries Cautious
Voice of America News reports: “Countries around the world trying to assess the impact of the U.S. credit downgrade on the global economy are starting to speak out.
China issued a stern warning to the United States criticizing the country’s debt addiction and saying Washington needs to understand it can no longer borrow its way out of economic problems.
The commentary by communist China’s official Xinhua news agency condemned the U.S. for what it called short-sighted political wrangling, and said the world needs a new, stable global reserve currency.
China’s central bank is the largest holder of U.S. public debt.
Other countries are reacting more cautiously. Japan, the second largest U.S. creditor, said the lower rating would not affect Tokyo’s approach to investing in U.S. debt. South Korea put the downgrade on the agenda for a meeting of its central bank officials, but along with Australia urged against an overreaction.
India, one of the world’s top emerging economies, called America’s downgraded credit rating a grave situation. Finance Minister Pranab Mukherjee refused to comment further, saying more analysis was needed.
Russia said it would keep its investments in U.S. debt stable, saying there was not much difference between a AAA and a AA+ rating.
In an interview French Finance Minister Francois Baroin also voiced support for the U.S., saying France had faith in Washington’s ability to right its economy. But Europe is also trying to confront its own economic woes, with Italy and Spain facing growing debt problems ” (James 4:1-4; Revelation 18:10, 17, 19; Ezekiel 7:19; Revelation 16:1. See the next two reports.)
Putin says U.S. is “parasite” on global economy
Reuters reports: “Russian Prime Minister Vladimir Putin accused the United States of living beyond its means like a parasite on the global economy and said dollar dominance was a threat to the financial markets.
They are living beyond their means and shifting a part of the weight of their problems to the world economy, Putin told the pro-Kremlin youth group Nashi while touring its lakeside summer camp some five hours drive north of Moscow.
They are living like parasites off the global economy and their monopoly of the dollar, Putin said at the open-air meeting with admiring young Russians in what looked like early campaigning before parliamentary and presidential polls.
US President Barack Obama earlier announced a last-ditch deal to cut about $2.4 trillion from the U.S. deficit over a decade, avoid a crushing debt default and stave off the risk that the nation’s AAA credit rating would be downgraded.
The deal initially soothed anxieties and led Russian stocks to jump to three-month highs, but jitters remained over the possibility of a credit downgrade.
Thank god, Putin said, that they had enough common sense and responsibility to make a balanced decision.
But Putin, who has often criticized the United States’ foreign exchange policy, noted that Russia holds a large amount of U.S. bonds and treasuries.
If over there (in America) there is a systemic malfunction, this will affect everyone, Putin told the young Russians.
Countries like Russia and China hold a significant part of their reserves in American securities … There should be other reserve currencies. ”
Dollar to Be ‘Discarded’ by World: China Rating Agency
CNBC reports: “The man who leads one of Chinas top rating agencies says the greenbacks status as the worlds reserve currency is set to wane as the worlds most powerful policy makers convene to examine the implication of S&Ps decision to strip the United States of its triple A rating.
In comments emailed to CNBC, Guan Jianzhong, chairman of Dagong Global Credit Rating, said the currency is gradually discarded by the world, and the process will be irreversible. ”