US Debt Down-Grade – Special Edition
10 Second Headlines of the Week – August 6, 2011
S&P Down-Grades US Debt
+ S&P down-grades US Debt from AAA to AA+ with a ‘negative outlook’. US has had a AAA rating since 1941.
+ Reflects their opinion that:
+ This down-grade was largely expected.
+ Federal Reserve said the cut would not impact their operations.
+ Chinas says the “good old days” of US borrowing are over and that further downgrades would likely undermine the world economic recovery.
+ China is recommending ‘international supervision over the issue of US dollar be introduced and a new, stable and secured global reserve currency may be an option’.
From our July 28, 2011 10 Second Headlines:
S&P Credit Ratings for G-20 Domestic Debt
AAA Rating: Canada, Australia, France Germany, UK, US
AA+ Rating: None
AA Rating: None
AA– Rating: China, Japan, Saudi Arabia
A+ Rating: Italy, S. Korea
BBB+ Rating: Russia
+ One or more of the 3 agencies may downgrade the US debt to AA+.
+ In 1994 Canada was downgraded to AA+ from AAA, and today we are AAA.
+ Over the past 20 years, debt of developed nations have been downgraded from AAA 9 times, including Australia in 1987 and Sweden in 1991.