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Poor standards PDF Print E-mail
Wednesday, 20 April 2011 00:00
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If your debt rises above a certain proportion of your annual income, and income is growing slowly, most credit-raters would hesitate to give you a good rating. The same applies to companies and countries. Look at the graph and you see things aren’t quite as simple. In the case of the US, which has just had its ratings outlook changed by Standard & Poors, the debt profile doesn’t seem to warrant the rating. The dollar being the global reserve currency gives the US a kind of leverage no other country has, but is there more to it? China’s debt profile and relative ranking suggests there may be.

 

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