Quote:The man who leads one of Chinaâ€™s top rating agencies says the greenbackâ€™s status as the worldâ€™s reserve currency is set to wane as the worldâ€™s most powerful policy makers convene to examine the implication of S&Pâ€™s decision to strip the United States of its triple â€œAâ€ rating.Read more: http://www.cnbc.com/id/44050325
In comments emailed to CNBC, Guan Jianzhong, chairman of Dagong Global Credit Rating, said the currency is â€œgradually discarded by the world,â€ and the â€œprocess will be irreversible.â€
Dagong made headlines last week when it became the first rating agency to cut its U.S. credit rating from â€œA+â€ to â€œAâ€ after policymakers in Washington failed to act in a timely manner to lift its debt celing.
However, the announcement failed to register in the markets as investors have yet to decide whether to take the Beijing-based company seriously.
â€œIt has been around for quite a while, but I do not know of anyone assigning risk assessment to thir portfolio according to Dagong,â€ said Steen Jakobsen, chief economist at Saxo Bank. â€œHowever, clearly the rating industry could do with some competition and deviance from firm beliefs.â€
But Guanâ€™s observationâ€”made just before S&P slashed its ratings on the worldâ€™s biggest economyâ€”now seems strangely prescient.
This could turn very ugly for what's left of the US economy. The raising of the debt ceiling actually seems to have had a more negative world impact than anything. There are signs all over that something really big is about to go down.