Chinese Ratings Agency Downgrades U.S. and U.K. Debt

Dagong International Credit Rating had downgraded the debt levels of the US and Britain, bringing them lower than China. China of course has about $3T in reserves.

Dagong a company that normally rates bonds, has now issued ratings of the creditworthiness of nations. Some dismiss this company's ratings as Chinese politics. However, as the debt of the U.S. keeps growing and growing with no end in sight, many realize that they do have a point here.

A couple of months ago Europe announced that it did not like te recent downgrades by Fitch, Moody’s and Standard & Poor's and announced they wanted to create their own rating agency (in addition to their own version of the silly bank stress tests).

Dagong also gives growth rates more weight than Fitch, Moody’s and Standard & Poor’s. Brazil, gets an A- 'stable' rating, while the U.S. get s aBBB-.

China gets an upgrade to AA+ - alongside Germany. Dagong saves its own AAA rating for the likes of commodity-rich Australia, Norway and New Zealand.

Dagong seeks to break the monopoly of the big three US agencies, the ones that failed miserably during the crisis of 2007 andf 2008, and amazingly are still in business.

Dagong says that the current western rating system "provides the wrong credit-rating information and fails to reflect changing conditions".