“Re the U.S. debt downgrade, you should know that credit ratings understate credit risks because they only rate the risk of the government not paying its debt. They don’t include the greater risk that the countries in debt will print money to pay their debts thus causing holders of the bonds to suffer losses from the decreased value of the money they’re getting (rather than from the decreased quantity of money they’re getting). Said differently, for those who care about the value of their money, the risks for U.S. government debt are greater than the rating agencies are conveying.”
Actually, when rating debt issued by a sovereign in its own currency, inflation is actually the only real risk the agencies should consider. However, when a nation owes a lot of debt to foreigners, who can't vote, the odds of a default on foreign-owned debt should be factored in.
— Peter Schiff (@PeterSchiff) May 20, 2025
The US debt crisis is set to get even WORSE: The House Reconciliation Bill would increase debt by $3.3 TRILLION, or $5.2 trillion by 2034 if made permanent. That would increase debt-to-GDP ratio to 125% or 129% if made permanent. National debt would hit up to $ 55 TRILLION. Bend over, Gen-Zs!
byu/Boo_Randy_II inWallstreetsilver