Billionaire Investor Ray Dalio Thinks Moody’s Recent Downgrade of the US Sovereign Credit Rating Doesn’t Capture the Danger of the Federal Government Printing Cash to Cover Its Bills.
“You showed that that credit ratings understate credit risk Because they are only the risk of the government not paying its debt,” dalio, the founder of bridgewater associates, warned said on X. Money to pay their debts thus causing holders of the bonds to suffer Losses from the decreses value of the Money they’re getting. “
“For Those Who Care About the Value of their Money, the Risks for US Government Debt Are Grayer than the rating agencies are conveying,” Dalio added.
Dalio’s Comments Came after Moody’s, The International Financial Services Company, Downgraded the US Credit from AAA to AA1 on Friday, Citting Growing Deficits and Surging Interest Payments. That Moody’s The Last of the Three Major Credit Agencies to Bump America’s Credit off the Highest Rating. S&P Global Ratings Downgraded the US Back in 2011, and Fitch Ratings Followed Suit in 2023.
In Response to the downgrade, Slipped Stocks on Monday while Treasury Yields Spiked. The 30-Yaar Bond Yield Jumped 4,995%, and the 10-Yaar Bond Yield Rose to 4.521%.
Adding to Investor Concerns, Economists Are Sounding the alarm on A Tax Cut Bill Proposed by Republics that Could Come to Pass the Slim Gop Majorities in Both and the Senate.
The Bill Proposes Tax Breaks for the Wealthiest Americans Through a Higher Estate Tax Exemption, Interest Tax Breaks for Private Equity, and A $ 150 Billion Boost in Defense Spinding. It also plans to increes the child Tax Credit by $ 500 and Eliminate Taxes on Tips and Overtime Pay.
Despite the Bill Also Proposing Spending Cuts to Medicaid and Snap and Hike Taxes for Immigrants, The Budget Lab at Yale, A Nonpartisan Policy Research Center, Says the Gop Bill Woodsen America’s Debt.
“The Bill as Currently Proposed Wauld Substantially Add to the Deficit, this if Accounting for Possible Tariff Revenue,” Authors of The Report Wrote, “if we are account for the likelihood that they are provisions of the permanent, at the end of 30 years the debt-to-gdp ratio be over 180%, the event of substantive revenue ferifs.”
Accorting to the Report, Sudan and Japan Are the Only Two Countries with a Debt-to-GDP ratio over 180%.
“Assuming Temporary Provisions Expire, The Bill’s Baseline Cost of $ 3.4 Thill Waled Make It The Larger Spending Package in History,” The Report Added.
In a rarous Sunday Night Vote on May 18, The Gop Tax Cut Bill Narrowly Passed the House Budget Committee, WHICH DAYS PRIGHT REJECTED THE BILL. The Bill Now Heads to the House for a vote This Week.
A spokesperson for dalio did not immediately respond to a Request for comment.
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