Sunday, August 7, 2011
Prior to Standard & Poor’s downgrading U.S. debt from AAA to AA — the first time this has happened in American history, Guan Jianzhong, chairman of Dagong Global Credit Rating, said the currency is “gradually discarded by the world,” and the “process will be irreversible.”
The comments were sent to CNBC in an email.
Guan’s observation, now strangely prescient.
“I think the most pressing issue facing the U.S. at the moment is to reflect on the crisis which happened in relation with the debt ceiling. They [the U.S.] should get a clear understanding that the continuous decline of the debt service capability will inevitably result in the outbreak of a sovereign debt crisis.”
China, the largest holder of U.S. debt, valued at approximately $1.2 trillion.