US sovereign risk downgraded?

Ratings agency Standard & Poor’s has done to the US what it did to AIG 2 ½ years ago. Well, sort of. Unbelievably, it effectively handed over a vote of no confidence in US political leaders to deal with the crazy deficits which have been growing on a massive scale.

Uncle Sam has been pawning to the hilt and is no longer deemed stable by the international bond market. Obama has managed to back Normandy back to the Krauts and Germany and France now rank higher than the Yanks!

I was watching the news a couple of weeks back on this issue and one of the Republican lawmakers was saying she wasn’t going to continue signing off borrowings from China to fund abortions carried out in the US.

This is just one of a range of issues creating a huge divide between the Republicans and Democrats, making approval of budgets increasingly difficult. I have not been folllowing the issues closely so I don’t know if this chasm is what’s causing S&P’s warning.

Maybe we have just witnessed the trigger to bury the greenback as a global currency and usher in the “Red Back” that is the Renminbi as its replacement. Will the Chinese now firmly stake its claim as the No 1 economic powerhouse of the world today?