May 17, 2025, 16:05
Moody's Ratings on Friday slashed US long-term issuer and senior unsecured ratings to Aa1 from Aaa citing rising government debt and interest payment ratios.
Meanwhile, Moody's Ratings changed the outlook of US sovereign rating from negative to stable.
"This one-notch downgrade on our 21-notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns," said a release by Moody's Ratings.
Moody's Ratings changed the outlook of US sovereign rating from stable to negative in November 2023.
"Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs," the release said.
"We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration. Over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat," it said.
In turn, persistent, large fiscal deficits will drive the government's debt and interest burden higher, said Moody's Ratings.
US fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns, according to the credit rating agency.
The downgrade on Friday means the United States has lost its last triple-A credit rating from a major ratings firm following cuts by Fitch Ratings in 2023 and S&P Global Ratings in 2011.
Moody's Ratings also forecasted a bleak outlook for the outlook of US debt burden and fiscal conditions in the coming decade.
Without adjustments to taxation and spending, the United States is expected to continue to have limited budget flexibility, with mandatory spending, including interest expense, to rise to around 78 percent of total spending by 2035 from about 73 percent in 2024.
If the 2017 Tax Cuts and Jobs Act is extended, it will add around $4 trillion to the federal fiscal primary (excluding interest payments) deficit over the next decade, according to Moody's Ratings.
Moody's Ratings anticipated that US federal debt burden would rise to about 134 percent of GDP by 2035, compared to 98 percent in 2024.
Despite high demand for US Treasury assets, higher Treasury yields since 2021 have contributed to a decline in debt affordability, warned Moody's Ratings.
Federal interest payments are likely to absorb around 30 percent of revenue by 2035, up from about 18 percent in 2024 and 9 percent in 2021, said Moody's Ratings.
"Moody's downgrade of the United States' credit rating should be a wake-up call to Trump and Congressional Republicans to end their reckless pursuit of their deficit-busting tax giveaway," US Senate Democratic Leader Chuck Schumer said in a statement on Friday.
I'm probably one of older and faithful member in this forum.
But I must say, also the most unlikeliest member to get a post actually posted.
The other day I posted:
China is sending Food to the starving Gazans, while America is sending Bombs.
No show at all.
Would you figure that's time to get out from this forum? 😕
You will never hear it from the whores in the financial press, but the United States is on the precipice of economic and social collapse. And what are the fools in Washington doing? The idiots are ginning up wars with Russia, China, and Iran.
- The United States Does Not Have an Economy
Making such a plan for authorized departures further proves that in the face of an overall stable and positive situation in China, the US intends to create more trouble to divert attention from the chaotic situation at home where its economy is now on the brink of collapse, and Washington needs to instigate a crisis overseas to attract oversea capital to the US, Lü Xiang, a research fellow at the Chinese Academy of Social Sciences, told the Global Times on Tuesday.
- Exclusive: Dirty trick again! US plots to authorize departure of staff from embassies in China over epidemic ahead of Beijing Olympics
The U.S. currency resumed its rapid weakening Wednesday, hitting fresh lows against the euro, the Japanese yen and the Swiss franc. The dollar decline has been historic, with the ICE U.S. Dollar Index, a measure of the greenback against a basket of currencies, slipping 8% this year, the worst start to a year in the index’s four-decade trading history.
- What the Weak Dollar Means for the Global Economy
'Sell America' is back as long-dated Treasurys hit 5% in wake of Moody's downgrade
As long as the debt money system exists, the money supply must grow so that the system does not collapse.
- Thomas Mayer
Except that the expansion of credit has gone so far that it's collapsing anyway.
The Great Satan faces a hyperinflationary run on the "worthless paper" USD unless it performs a soft default.
But before it devalues it has to balance its budget and trade.
And before it can do that it has to become an exporter to pay-off its huge debt.
As Marc Faber said YEARS AGO, Great Satan bonds are already junk:
'Junk' Treasuries no haven even in depression, Faber warns
By Martin Steward16 January 2013
Even Bloomberg BS admits the three corrupt ratings agenices are corrupt.
Moody's Tells Us What We Already Know About US Debt
They awarded AAA ratings to the subprime toxic waste and only after the Great Satan financial crisis did they re-rate them to junk, thereby admitting that either they were corrupt and/or incompetent.
They award China, history's greatest ever creditor a lower rating than the Great Satan history's worst ever debtor and defaulter. That's as absurd as awarding a Nobel peace prize to war criminal, Henry Kissinger, one of the most vile, subhuman sacks of excrement, if not THE most vile in all of history. It's like banning Russia from the krappy Eurovision Song Contest, but then refusing to ban the illegitimate state of New Izrael even as it openly states it's committing genocide and ethnic cleansing and with a VERY LONG history of doing so.
In other words, the Great Satan is the epitome of KRAP.
"China Drops to No. 3 Holder of Treasuries, Behind UK"
In fact, including corporate bonds, the poodle-state was already the second biggest holder despite not having had a trade surplus since 1982. In other words, even the "English Patient" is supporting the Great Satan patient.
The Great Reset is being implemented. The Great Satan is up poo creek without a paddle.
It was noted that Janet Yellen went to China and bowed profusely. Most assumed she was there to BEG China to buy Great Satan bonds. But everyone's dumping them including the FED. Whatever it was, China-basher Schumer then went to China too!!!!!
The trickle of articles admitting the Great Satan will default again has become a flood. They're now dropping any pretense. War criminal, The Donald, is making concessions not only to China and Russia but to Iran too.
There will be an announcement and SOON.
No prizes for guessing why gold is ROCKETING higher.
ASTONISHING!
Moody's has maintained a wholly undeserved AAA rating on the Great Satan since 1917. All three of the corrupt ratings agencies maintained it before, during and after war criminal, Nixon, defaulted on gold in 1971; the biggest default in all of history. Now, with HUGE delays between the three, S&P, Fitch and finally Moody's.
If that doesn't spell I M P L O S I O N, I don't know what does!
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