Question US credit rating "negative": impact on US currency holdings?

[jafo]

Moody's turns negative on US credit rating, draws Washington ire. NEW YORK/WASHINGTON, Nov 10 (Reuters) - Moody's on Friday lowered its outlook on the U.S. credit rating to "negative" from "stable" citing large fiscal deficits and a decline in debt affordability, a move that drew immediate criticism from President Joe Biden's administration. The move follows a rating downgrade of the sovereign by another ratings agency, Fitch, this year, which came after months of political brinkmanship around the U.S. debt ceiling.

To those who also have US-denominated currency, what effects can this have on us? 🙄

 

[wellington]

If the T-Bill market rolls over, it will take most of the Western economy with it... it's kinda like a nuke going off in every city at once.

If holding $ -> Move to stablecoins so can instantly be liquidated... it takes about 10 minutes before market makers realise theres an issue, and about 1hr for a peg to break down, more than enough time to flip to another currency (stablecoin).

If holding $ in the bank, the doors will be bolted with the funds inside.

Alas Xi in the US -> Depends on whether he will stop selling T-Bills, or even buy T-Bills.... what happens to the US.

March (by) it will all come to ahead anyway, and next year US needs to sell 12-15 trillion$ of bills.. either to other countries or to itself with YCC.

Last edited: Nov 15, 2023

 

[jafo]

wellington said:
If holding $ -> Move to stablecoins so can instantly be liquidated... it takes about 10 minutes before market makers realise theres an issue, and about 1hr for a peg to break down, more than enough time to flip to another currency (stablecoin).
Click to expand...

USDT is pegged to the US dollar, correct?
So, if the US dollar takes a tumble, shouldn't the USDT also take a tumble?

My real question is: Shouldn't I move my excess USDT into Bitcoin?
What about US dollars? Into EUR, CHF, Yuan, GBP???

 

[Martin Everson]

“While the statement by Moody's maintains the United States' Aaa rating, we disagree with the shift to a negative outlook. The American economy remains strong, and Treasury securities are the world's preeminent safe and liquid asset," Deputy Treasury Secretary Wally Adeyemo said in a statement."

When a Yoruba man tells you your asset is safe....run..lol eek¤%&.

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[JohnnyDoe]

jafo said:
USDT is pegged to the US dollar, correct?
Click to expand...

Yes, and the peg is based on faith. More specifically, on faith in Inspector Gadget (and/or whoever controls him) and his bungalow-based operation. Those who know will understand (do you know him, @Martin Everson ?)

jafo said:
So, if the US dollar takes a tumble, shouldn't the USDT also take a tumble?
Click to expand...

Of course yes, and a bigger one.

jafo said:
My real question is: Shouldn't I move my excess USDT into Bitcoin?
Click to expand...

Of course you should. I also recommend a bit of rules-based diversification, for example by following a crypto index.

jafo said:
What about US dollars? Into EUR, CHF, Yuan, GBP???
Click to expand...

What do you normally do with your garbage? You don't keep it in the house overnight, right?

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[wellington]

JohnnyDoe said:
Yes, and the peg is based on faith. More specifically, on faith in Inspector Gadget (and/or whoever controls him) and his bungalow-based operation. Those who know will understand (do you know him, @Martin Everson ?)

Of course yes, and a bigger one.

Of course you should. I also recommend a bit of rules-based diversification, for example by following a crypto index.

What do you normally do with your garbage? You don't keep it in the house overnight, right?
Click to expand...

Believe it or not, SGD... [When the USD takes a tumble] - For USDT/USDC -> $XSGD -> has liquidity and easy on-off regulated ramps.

It's reported as high debt to GDP, however when you really look into it, it has one of the lowest debt to GDP's in the world, and in addition is at a key pass through point in the world (shipping) and sits firmly between two geopolitical interests.

Singapore therefore is essential to operate for both parties and is a toll booth for world trade, in other words it should do fine.

 

[Martin Everson]

JohnnyDoe said:
do you know him, @Martin Everson ?
Click to expand...

No

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[JohnnyDoe]

Martin Everson said:
No
Click to expand...

He has been roaming around Nassau for many years

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[jafo]

JohnnyDoe said:
Of course you should
Click to expand...

Done!

JohnnyDoe said:
I also recommend a bit of rules-based diversification, for example by following a crypto index.
Click to expand...

Any particular one or diversify in all of them?

Crypto Index is OUTSIDE my area of competence, so ELI5, please ange¤%&

JohnnyDoe said:
What do you normally do with your garbage? You don't keep it in the house overnight, right?
Click to expand...

Got it! Thanks!

wellington said:
Believe it or not, SGD... [When the USD takes a tumble] - For USDT/USDC -> $XSGD -> has liquidity and easy on-off regulated ramps.

It's reported as high debt to GDP, however when you really look into it, it has one of the lowest debt to GDP's in the world, and in addition is at a key pass through point in the world (shipping) and sits firmly between two geopolitical interests.

Singapore therefore is essential to operate for both parties and is a toll booth for world trade, in other words it should do fine.
Click to expand...

How would you do this? Imagine you had a grandchild who was 5 (and NOT very bright 🙄) , how would you explain this to him?

 

[JohnnyDoe]

jafo said:
View attachment 5638

Any particular one or diversify in all of them?
Click to expand...

https://cci30.com/

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[wellington]

JohnnyDoe said:
Nassau for many years
Click to expand...

Probably unwilling to give up the fritters... it takes a lot of effort... sometimes dream about eating them... was one of the good things about travelling over to Nassau from the the Exhuma.

JohnnyDoe said:
https://cci30.com/
Click to expand...

If anyone knows of a fund manager (that accepts crypto) to take a ETF position on the space itself -> regulated of-course -> would be interested to know.

Normally we have direct management internally but looking to push out to other parties to we can concentrate on our core objectives.

 

[jafo]

wellington said:
If anyone knows of a fund manager (that accepts crypto) to take a ETF position on the space itself -> regulated of-course -> would be interested to know.
Click to expand...

100% this! Me too!

 

[JohnnyDoe]

wellington said:
If anyone knows of a fund manager (that accepts crypto) to take a ETF position on the space itself -> regulated of-course -> would be interested to know.
Click to expand...

what do you mean with ETF position? There are no ETFs on crypto yet, and there will just be some on BTC and ETH in the near future.

wellington said:
Normally we have direct management internally but looking to push out to other parties to we can concentrate on our core objectives.
Click to expand...

It's not difficult to DIY and it is against the spirit of crypto to delegate your investments.

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[wellington]

JohnnyDoe said:
what do you mean with ETF position? There are no ETFs on crypto yet, and there will just be some on BTC and ETH in the near future.
Click to expand...

I thought there was a 30 basket crypto ETF in Europe (mentioned above).

 

[JohnnyDoe]

wellington said:
I thought there was a 30 basket crypto ETF in Europe (mentioned above).
Click to expand...

There are some tracker certificates around, avoid. They are badly built and badly managed. Rubbish.
You can do better by yourself, it's not difficult and you can rebalance your portfolio even just 1-2 times per year.

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