The Chinese government, I should clarify. A new Chinese rating agency had this to say about US government debt:
Dagong has downgraded the local and foreign currency long term sovereign credit rating of the United States of America (hereinafter referred to as “United States” ) from “AA” to “A+“, which reflects its deteriorating debt repayment capability and drastic decline of the government’s intention of debt repayment.
The serious defects in the United States economic development and management model will lead to the long-term recession of its national economy, fundamentally lowering the national solvency. The new round of quantitative easing monetary policy adopted by the Federal Reserve has brought about an obvious trend of depreciation of the U.S. dollar, and the continuation and deepening of credit crisis in the U.S. Such a move entirely encroaches on the interests of the creditors, indicating the decline of the U.S. government’s intention of debt repayment. Analysis shows that the crisis confronting the U.S. cannot be ultimately resolved through currency depreciation. On the contrary, it is likely that an overall crisis might be triggered by the U.S. government’s policy to continuously depreciate the U.S. dollar against the will of creditors.
I wholeheartedly agree with everything in the above analysis. Alas, here is what Paul Krugman has to say about their assessment: “Way to build credibility, guys — just in case anyone wondered whether Dagong would be truly independent, or just a tool for Chinese policy ….”
It’s funny how so many people around the world are tools of their governments. Only a fool could possibly disagree with quantitative easing.