The United States Was "Downgraded" Or Just &Nbsp.

News background

On the 18 day, the US Standard & Poor's Rating firm, one of the world's three largest credit rating agencies, announced that the outlook for long-term sovereign credit in the United States should be downgraded from "stability" to "negative" and that sovereign credit rating will remain unchanged. This is the first time that S & P has downgraded its outlook rating from "stability" to "negative" since it began rating the sovereign credit of the United States 70 years ago.

As a result of this news, European and American stock markets suffered setbacks, oil prices also fell and dragged down the Asian Pacific stock market. Some analysts said that if the United States could not solve the financial problems, it could lead to further decline in the market.

Why did the S & P choose to downgrade the future of US sovereign credit at this time? What will this impact on the US and the world economy? As China's largest holder of US Treasury bonds, will China suffer from the fish in the pond?

At this round of the Guangzhou daily Roundtable, we invited two experts studying the world economy to analyze and comment.

Core tips

S & P is mainly making a gesture to show its so-called "impartial" attitude, and there will be no big moves in the future. The US is now trying to get the euro down, but it has been busy for a long time to make emerging markets cheaper. So the next step is likely to lead to the emerging market with bubbles and hot money. The action of S & P may be such a signal.

Jiang Yong, director of the center for economic security research, China Institute of international relations

Even holding euro and yen has risks of devaluation. Within 10 years, unless the renminbi is internationalized, there is no currency to challenge the US dollar, and holding its national debt is relatively safe. China can raise the security issues of US dollar assets to the us through multilateral channels. These channels include international platforms such as IMF, international or regional groups, including the Sino US bilateral platform.

Chen Fengying, director of the Institute of world economics, Institute of modern international relations, China

Motivation analysis

Deliberately exaggerating European debt

S & P needs to make some gestures.

The financial crisis has erupted for more than two years. In the most serious financial crisis in the United States, the outlook for sovereign credit in the United States has not been lowered. Now the US economic recovery is better than expected, and this year has shown signs of acceleration. Why did the S & P choose to lower US sovereign credit prospects at this time?

Chen Fengying believes that the decision of the S & P to downgrade the outlook for US sovereign credit is based mainly on the fact that the United States is facing a serious fiscal deficit. Secondly, there are differences in the policies of the Republican and democratic parties.

Jiang believes that the trend of the reduction of US sovereign credit by the S & P is mainly to make a gesture to show its so-called "impartial" attitude, and there will be no big moves in the future. Jiang said, in fact, the debt of the United States is more serious than many European countries. However, S & P has repeatedly reduced the sovereign credit of European countries. This is based on one interest: the United States must fight the euro down. The creation of the whole European debt crisis is the bugle call of the S & P and Moodie. However, S & P can not do too much, so we need to make some gestures.

Jiang also analyzed that the S & P's action could also be a signal to further expand the war to the emerging market. Jiang said that the first aim of the United States is to fight the euro, but it has been busy for a long time to make emerging markets cheaper. So the next step is likely to lead the fire to emerging markets with hot money.

World influence

Short impact on the market

No need to overread.

S & P downgraded the outlook for US sovereign credit, and its influence is now on the horizon. The US three largest stock index fell more than 2%, reaching a new high in one month. Major European stock indexes also fell sharply. Oil prices in New York have fallen by more than 2%. At the same time, investor risk aversion is high, selling speculative varieties and buying gold, prompting gold prices to rise to a new high on the 18 day.

It is predicted that the second round of quantitative easing monetary policy in the United States will expire at the end of June. If the United States starts a new round of quantitative easing with the prospect of a decline in the rating, it will undoubtedly boost the world economy by boosting global inflation.

In this regard, two experts believe that the situation is not as serious as the outside imagination. The impact of this downgrade on the US and the world economy is short-lived.

Jiang Chung has repeatedly stressed that this demotion is of no practical significance and should not be over interpreted, and that the stock market shock is normal.

Chen Fengying pointed out that since March, the US stock market has been rising and shaking, and it will definitely adjust in the near future, and this downgrade is the normal time for adjustment. But the impact of the "negative" evaluation of S & P is smaller than expected, and the reaction of the market is only a short reaction.

China influence

The dollar is unlikely to depreciate.

Should China sell US debt?

China holds more than US $1 trillion of US Treasury bonds and is the largest holder of US Treasury bonds. S & P's downgrading of US sovereign credit rating will affect China's asset security?

Some analysts believe that the S & P's downgrading of the US debt rating outlook from "stability" to "negative" may cause a new round of depreciation of the US dollar. This will directly lead to the depreciation of more than 3 billion US dollars in foreign reserves and lead to a faster appreciation of the renminbi.

In this regard, Jiang Yong and Chen Fengying both believe that the US dollar is unlikely to depreciate because of this grade reduction. In order to deal with the risk of holding the US debt, China really needs to take measures to ensure the safety of its assets.

Jiang pointed out that, whether or not the S & P's downgrade, China should withdraw from the US Treasury bond market early and lose less. He said that the credit crisis in the United States is becoming more and more serious. The more risks China takes, the greater the risk of kidnapping.

Chen Fengying believes that the US dollar will not collapse, and that holding US Treasuries is relatively safe.

She said that China's large holdings of US bonds have risks for both sides. China is afraid of the depreciation of the US dollar, and the United States is also worried about national security. The global bond market is not large, and the largest and most liquid market is in the United States. Chen Fengying pointed out that even holding euro and Japanese yen also has the risk of devaluation.

Chen Fengying concluded that the US dollar is still a reliable currency. In the next 10 years, unless the RMB is internationalized, there will be no currency to challenge the US dollar. Holding its national debt is relatively safe. After all, the United States is the world's largest economy, and the dollar will not collapse.

Chen Fengying also advocated diversifying investment in foreign exchange. However, she pointed out that resource investment is not safe. A comprehensive analysis shows that holding US dollars is safer than holding resources.

Chen Fengying said that although China could see the risk of holding US Treasury bonds, it had no choice but to safeguard its security through various channels. For example, China can raise the security issues of US dollar assets through multilateral channels, including IMF and other international platforms, including the Sino US bilateral platform.

Prospect forecast

S & P is controlled by the US government.

The United States will not condemn itself to death.

The S & P ratings of the US's sovereign credit outlook declined from "stability" to "negative". Is there a possibility that the sovereign credit of the United States will be lowered from the current highest level of AAA? In response, the two experts firmly expressed that this could not happen.

Jiang pointed out that the S & P "did not dare to lower" the sovereign credit rating of the United States, "it will not condemn itself to death." As a corporate body, the rights and status of S & P are all given by the government and controlled by the power machine. Sovereign rating is political in itself, and a bigger rating agency is not a sovereign state. The US government and rating agencies have always been good at singing your face. He jokes that, if he wants to turn down, S & P must approve the report unless authorized by the government.

Chen Fengying also believes that it is impossible to go to this step, "after all, the S & P company is controlled by the US government." She believes that the prospect of downgrading sovereign credit is a warning to the United States and no further action will be taken.

Noun interpretation

sovereign debt

Sovereign debt refers to the debt borrowed by a country with its own sovereignty as its guarantee, and the debtor includes the International Monetary Fund, the world bank and other countries.

Sovereign default

When a country's debt increases significantly and cannot be repaid, sovereign default is possible. More influential sovereign debt default cases occurred in the history of Argentina sovereign debt in 1990s and Dubai's sovereign debt default in November 2009.

Sovereign credit rating

Sovereign credit rating is a credit rating agency's evaluation of the solvency of a country or government as a debtor. The higher the credit level is, the stronger the debt paying ability will be, and the investor will be willing to purchase his securities, and the financing ability will be enhanced.