As most people with access to a TV — living under a rock and otherwise — are aware, US debt was downgraded by Standard & Poor’s late Friday night from AAA to AA+.
Since the US credit rating downgrade the Chinese yuan is flirting with 17-year highs.
Are we witnessing a major global economic turning point? Is it only a matter of time before China’s credit rating matches the US? Or, before a yuan is worth more than a dollar?
You can laugh now, but, when the euro’s value surpassed the dollar’s in the early 2000s, it never looked back.
These landmark moments seem unlikely in the near term, but then again to many… not so much here… so did the US’ first ever credit downgrade in about 70 years. Bank of America already thinks another downgrade is possible by November.
The above are a but a few of the key questions worth considering, and you can rest assured we’ll be watching the next developments closely. Because — as Ben Franklin explained, and the cartoon below goes to highlight — “The definition of insanity is doing the same thing over and over and expecting different results.”
China’s Currency Flirting With Highs on US Credit Rating Downgrade originally appeared in the Daily Reckoning. The Daily Reckoning provides 400,000+ readers economic news, market analysis, and contrarian investment ideas. Follow the Daily Reckoning on Facebook.