Joe Biden’s Presidency is a catastrophe for the economy.
One disaster of epic proportions shocked the financial world.
And Shark Tank star Kevin O’Leary sounded the alarm on this colossal blunder by Joe Biden.
The financial world was shocked when Fitch Ratings downgraded America’s debt from its highest rating of AAA to AA+.
Fitch cited the country’s exploding national debt and deteriorating fiscal conditions for its decision to make the downgrade.
President Joe Biden was handed one of the most brutal rejections of the unprecedented government spending that has occurred under him.
Shark Tank star and investor Kevin O’Leary told Fox News that everyone should be concerned by the downgrade.
“There is no way to sugarcoat this at all,” O’Leary said. “It’s bad.”
“And I’ll tell you how you measure it’s bad,” O’Leary continued. “Basically, when you downgrade the U.S. economy, which is what this downgrading is, you are losing a little faith in the U.S. dollar and the U.S. Treasury bill because the default currency of the world, defined by every commodity priced by U.S. dollars, is the good faith of the U.S. government and the whole world trusts it. Most sovereign funds keep the majority of their liquidity in U.S. dollars.”
US debt has long been considered a safe haven asset for investors around the globe, but the Biden regime’s reckless spending and the downgrade could give investors pause.
“That got hurt 24 hours ago because now you start to ask yourself, Well, where is this going?” O’Leary asked. “A downgrade from AAA to AA+, does it go to single? Now, if you’re a sovereign wealth fund, you start to put that in your mind. And the bottom line for you and me is the cost of capital goes up. In other words, what it costs for us to borrow money to fund the government and the deficit goes up. No sugar coating that.”
If demand drops for debt, the government would be forced to respond by raising interest on it to entice investors.
“Now, how does this actually affect the next 24 months? Well, let me explain,” O’Leary continued. “Think about the CHIPS Act and the Inflation Reduction Act. We’re printing billions of dollars. Government claims it has merit. It’s important to do this but at the same time, that’s just a lot of spending, and that increases the deficit.”
After the last two fiscally irresponsible bills signed off on by Biden, O’Leary said that the ratings agency had seen enough and pulled the trigger on a downgrade.
“Your car loan just went up from five to somewhere between seven and 9%,” O’Leary added. “That’s not going to help. So the cost of your loan and your borrowing and your mortgage are going up, period.”
Americans are going to pay the price for Joe Biden’s foolish decision to spend trillions of dollars that the country doesn’t have on left-wing political priorities.
