US Debt Downgrade May Have Chinese Connection
\nPosted by Bill Conroy – August 14, 2011 – Narco News<\/p>\n
S&P\u2019s Action Appears to Have Triggered Enhanced Fortunes for Some US Business Interests in China<\/p>\n
Standard & Poor\u2019s recent downgrading of the US credit rating is being billed in the media as a major blow to the economic credibility of the nation and to the future election prospects of President Obama, but there are some special interests that appear to have benefited from that black mark on the US currency.<\/p>\n
Those beneficiaries include the parent company of S&P as well as a Republican senator and aspiring vice presidential candidate who played a key role in the recent debt-ceiling negotiations that engulfed Congress and the White House in turmoil over the summer.<\/p>\n
On Aug. 5, S&P, a subsidiary of McGraw-Hill Cos., lowered its assessment of US long-term debt, cutting its rating from a top-notch AAA to a slightly less-favorable AA+ (the only major rating agency to do so) and in the process sent shock waves through world markets.<\/p>\n
Within days of that action, another event occurred that was barely covered in the mainstream media.<\/p>\n
The Chinese currency, the yuan, spiked suddenly in value, reaching in a few days a 17-year high against the dollar. And this was not an unexpected result in the wake of S&P\u2019s downgrading of US debt, according to some economists, given that China holds $1.2 trillion in U.S. Treasury notes and as much as $2 trillion more in US dollars \u2014 all of which became less valuable in the wake of the credit downgrade.<\/p>\n
The Dow Jones news service reported on Aug. 1, four days prior to S&P\u2019s downgrade, that an economist with a major Chinese state-run think tank was predicting just such a spike in the value of the yuan (also known as the renminbi, or RMB) should the US credit rating be slashed. …more<\/a><\/p>\n