In a "surprise" move to anyone not paying attention, credit agency Fitch slashed the American government's credit rating from AAA to AA+ on Tuesday, citing "steady deterioration in standards of governance."
The dollar ticked lower following the downgrade, which came two months after President Biden and the Republican-controlled House reached a debt ceiling agreement after months of political brinkmanship. The deal lifted the government's $31.4 trillion debt ceiling.
"In Fitch's view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025," the rating agency said in a statement.
Biden's treasury secretary, Janet Yellen - a woman who has been wrong on practically every economic and fiscal policy in my lifetime - said the the move was "based on outdated data."
Here's a handy reminder of where the United States stands:
The reason the credit rating isn't lower is that the US dollar is the world's standard and lowering it too far would mean worldwide economic doom.
(But that's inevitable)
Think of that person you know who is always spending way more than they have. They buy new shoes, new gadgets, and new cars like the end of the world is coming and they're up to their eyeballs in debt.
The US government is like that, but trillions of dollars worse.
In the past 8 weeks, the bureaucrats have added $1.8 trillion in debt by suspending the debt ceiling (they got rid of the rule limiting how much money they could spend so they could spend as much as they want).
Twenty years ago, the entire U.S. debt - not yearly, but ALL of it - was under $7 trillion. But the swamp creatures just spent about a quarter of that since your kids started summer vacation.
"This was unexpected, kind of came from left field," said Keith Lerner, Co-Chief Investment Officer, Truist Advisory Services, Atlanta. "As far as the market impact, it's uncertain right now. The market is at a point where it's somewhat vulnerable to bad news…"
It's always "out of left field" to the people not paying attention (or the people in on the scheme).
I want to remind you of something. Check the dates on these news articles:
That's what the media said before the recession of 2008.
The national debt was around 10 trillion then.
Now it's at $33 trillion and a lot of bad stuff is coming down the pipe all at once.
What do you think is about to happen?
Better yet, how do you think you should prepare?
