Investor and financial advisor Kevin O’Leary recently appeared on FOX News to offer his opinion about the recent downgrade of the credit of the United States. He did not hold back.
The host pointed out that the Biden administration is trying to pin this on Donald Trump, but O’Leary reminded him that this sort of thing is based on government and policy.
This is happening on Biden’s watch and he has no one to blame but himself and his administration.
Transcript via FOX News:
KEVIN O’LEARY: There is no way to sugarcoat this at all. It’s bad. And I’ll tell you how you measure it’s bad. 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. Trust it.
Most sovereign funds keep the majority of their liquidity in U.S. dollars. That got hurt 24 hours ago because now you start to ask yourself, well, where is this going? 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 deficit goes up. No sugarcoating that.
Now, how does this actually affect the next 24 months? Well, let me explain. 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. And that’s why Finch did this. They downgraded it.
And I wouldn’t say it was the two bills that caused the camel’s back to be broken, but it was enough for them to say, OK, I’ve seen enough now for me and you or anybody. The kitchen table in America, your car loan just went up from five to somewhere between seven and nine percent.
Here’s the video:
Joe Biden and Democrats cannot spin their way out of this.
Their policies are horrible for the health of the United States.