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Oil-For-Yuan Contract This Week Or Not: China Just Hammered Two More Nails In The Dollar Coffin

The grim reaper is coming for the petrodollar.

  • Oil-For-Yuan Contract This Week Or Not: China Just Hammered Two More Nails In The Dollar Coffin
    It’s not just oil-for-yuan or oil-for-gold. Here’s two more nails the Chinese just hammered into the U.S. Dollar Coffin…

    Two pieces of news have recently surfaced that while on the surface signal a bunch of legalese and market mumbo-jumbo, they are two more clear examples of what is looking more and more like the U.S. dollar’s “death by a thousand cuts.

    First, one of China’s Credit Rating Agencies, Dagong Global Credit Rating Co, which would be akin to Standard and Poor’s in the U.S., has cut the United State’s sovereign rattings from A- to BBB+. Here’s more from Reuters:

    China’s Dagong Global Credit Rating Co, one of the country’s most prominent ratings firms, on Tuesday cut the local and foreign currency sovereign ratings of the United States, citing an increasing reliance on debt in the world’s largest economy.

    Dagong said in a statement that it cut the sovereign ratings to BBB+ from A- and also placed them on a negative outlook.

    The growing reliance on the debt-driven mode of economic development will continue to erode the solvency of the U.S. federal government, the Beijing-based ratings agency said.

    Of course, we have been talking about the unsustainability of this debt-based paradigm ad nauseum, but what we are seeing now are the incremental steps towards the unsustainable paradigm being laid bare for all to see.

    read more.


January 19, 2018 - Posted by | Economics | , , , , , , ,

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