ENTER THE DRAGON

Not to be outdone, two days later, on July 21, China entered the fray. China's leading credit rating agency, Dagong Global Credit Rating Co., cut the USA's credit rating from AAA to AA. Of course this didn't even make it into the controlled mass media in the US but it is big news.

It's big news because China is the largest holder of US Government debt (see chart below).


China has increased its holding of US Government debt 900% since 2001! That is an average of 100% per year when based on 2001 levels. If there was a way to invest in a derivative of the increase in Chinese debt over the last 10 years this would have been the investment of the decade!

But it appears that China is finally putting on the brakes. In August of 2009 they owned $936.5 billion in US Government debt. The last reported figures, for May 2010, show that China "only" owned $867.7 billion. That's a 7% drop in the last 9 months. That's a mammoth change

FIND OUT MORE