Why is an American company going round the world rating each countries' credit standing.
Who is setting thiese standards ? Who decides Who is poor ?
Standard & Poor aka as S&P.
Having said that China has entered the credit cycle that affects all modern banking system.
The day that commercial banks were allowed to lend and people allowed to borrow,
it has set in motion market cycle, credit cycle that eventually leads to a bubble just becasue
of human's need for expansion.
According to this article, S&P is not even saying IF a credit risk is imminent,
its saying watch out, its coming.
Its only a matter of degree and when it comes it will be not that bad.
Just like telling a child who is about to be given an injection.
Candies will be given to soothe the pain, but first the pain that will make you better and you get a
lolly even for something that is good for you.
Or like the father that has to spank you becasue you have overspend but who had not stop giving
you allowances everytime you ask.
China has been warning about surge in property prices, has put in measure to stop its dramatic rise. Cooling
credit growth is just like saying I am going to decrease the amount of money in the market. With lesser money, demand comes down, especially speculative demand not real demand.
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