Dagong Global downgrades US ratings

The fiscal cliff is not only causing domestic problems for the U.S.. Chinese ratings agency, Dagong Global on Tuesday downgraded U.S. local and foreign sovereign debt ratings to its negative watch list.

Dagong said the U.S. government failed to reach a long-term agreement on how to solve the sovereign debt crisis, which worsens its fiscal situation. In addition, the US shows little willingness to repay the debts and instead depends on monetizing them.

In Dagong's report, it forecast the U.S. debt at about 105 percent of its annual GDP and almost 6 times of the fiscal revenue at the end of this year.