Fitch Ratings downgraded its US debt rating on Tuesday from the highest AAA rating to AA+, citing “a steady deterioration in standards of governance.”
The downgrade comes after lawmakers negotiated up until the last minute on a debt ceiling deal earlier this year, risking the nation’s first default. But the January 6 insurrection was also a major contributing factor.
In a meeting with Biden administration officials, representatives from Fitch Ratings repeatedly highlighted the January 6th insurrection as a significant concern as it relates to US governance.
A fitch downgrade? Big deal! Right?
Yeah, in the next five minutes nothing will change. But over time it is indeed a very big deal when you have two thirds of the world's population represented by the BRICS actively de-dollarizing and 40 to 50 other countries seeking to join the BRICS economic block. THis is just more amunition for them to site as to why the dollar is not the bastion of stability it once was.
Stability.
That is the dollar's main strength.
Now that the previous president has been indicted for his connection to events that have serverely impacted the dollar's stability his allies are attacking the stability of the judicial system. This translates directly to more dollar instability.
To be sure there are no stable economies in the world right now. So the dollar is still the most stable currency - outside of Gold.
But each blow to dollar stability is one more bastion of support for Gold as the anti-dollar.
And all those governments seeking to de-dollarize are making gold an increasing part of their reserves.
The process is slow. You can't see it happening except in the slow, steady increase over time in the price of gold.
But things in the economic world happen (As Hemmingway famously observed) Gradually and then Suddenly.
Suddenly the gold price witll be $2500. Then $3000.
And then will you buy or figure you've missed the move and will wait for it to come back to you?
Then it will be $3500. Then the fear of missing out crowd will wake up....
Get ahead of the trend and be patient. Gradually always becomes suddenly in the financial world. It's just now possible to predict when.
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