'Shark Tank' star Kevin O'Leary says US debt-rating downgrade means there's less faith in the dollar and Treasurys
"Really, this downgrade is about debt and the ability to pay it back. It looks beyond any one event. Doesn't matter: the more the government goes into deficit spending, the more rating agencies scrutinize the quality of that debt," O'Leary said.According to O'Leary, the latest ratings drop will make sovereign wealth funds rethink their dollar holdings — a majority of their liquidity — and they could now be considering whether further downgrades are forthcoming.
Effectively, the lowered rating also means a higher cost of borrowing for the US, which deepens federal deficit spending. American consumers should prepare to pay more too. "Now for me and you, or anybody at a kitchen table in America, your car loan just went up from 5% to somewhere between 7% and 9%. That's not going to help," he said."So, the cost of your loan and your borrowing and your mortgage: going up — period."
Others on Wall Street downplayed Fitch's downgrade. Many analysts shrugged it off, with Goldman Sachs saying it"
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