China’s biggest ratings agency, Dagong Global Credit Rating, is threaten the US that it may downgrade the US’s sovereign debt rating because of Washington’s failure to tackle the federal budget deficit. If China does it, this will be the third time with in two years. that US’s debt rate got downgraded from AA to A+, in august, it got downgraded to A.Following Dagong’s foot print, many western agencies did the same thing.

With the US’s economy right now, the only way it can make a change is to lower the value of US dollar and print more money.

But since “China is the largest foreign buyer of US government debt“, by lowering the US dollar value will be a huge loss for China’s own economy. And by downgrading US’s debt rating, it will be harder for the US to borrow money from other countries in the future.

So there is no way the US will be able to pay its debt back. Maybe China is treating the US loan as a “Sunk Cost”, since China’s economy is still doing well. And the reason why China is downgrading US’s debt rate and will be continue doing it, is to sit back and watch US’s “sinking”.