The "Good Old Days" Are Over - China Warns U.S.

America's biggest creditor isn't amused by that country's newly downgraded, AA+ rating.  Now China says the "good old days" are over for the U.S.

China has renewed its demand for a new reserve currency to replace the U.S. greenback.   America dreads the thought at having to borrow - and repay - money in another nation's currency.  All manner of advantages accrue to the United States so long as its dollar is accepted as the reserve currency.

"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," China's official Xinhua news agency said in a commentary.

In the Xinhua commentary, China scorned the United States for its "debt addiction" and "short sighted" political wrangling.


"China, the largest creditor of the world's sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets," it said. 

It urged the United States to cut military and social welfare expenditure. Further credit downgrades would very likely undermine the world economic recovery and trigger new rounds of financial turmoil, it said.

"International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country," Xinhua said.