Ray Dalio criticized Moody's downgrade of the US credit rating, stating it underestimates risks related to money printing. He argues these credit ratings focus solely on debt repayment risk and overlook the broader implications, such as currency devaluation. Following Moody's downgrade from Aaa to Aa1, which cited increasing deficits and rising interest payments, concerns grew about the potential impact of a proposed GOP tax legislation that may further increase US debt through tax breaks and heightened defense spending. This environment has led to rising Treasury yields and declining stock prices, indicating market apprehension.
You should know that credit ratings understate credit risks because they only rate the risk of the government not paying its debt.
For those who care about the value of their money, the risks for US government debt are greater than the rating agencies are conveying.
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