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.

 

[jafo]

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).

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 .

 

[JohnnyDoe]

USDT is pegged to the US dollar, correct?

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 ?)

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

Of course yes, and a bigger one.

My real question is: Shouldn't I move my excess USDT into Bitcoin?

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

What about US dollars? Into EUR, CHF, Yuan, GBP???

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

 

[wellington]

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?

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]

do you know him, @Martin Everson ?

No

 

[JohnnyDoe]

No

He has been roaming around Nassau for many years

 

[jafo]

Of course you should

Done!

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

Any particular one or diversify in all of them?

Crypto Index is OUTSIDE my area of competence, so ELI5, please

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

Got it! Thanks!

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.

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]

View attachment 5638

Any particular one or diversify in all of them?

https://cci30.com/

 

[wellington]

Nassau for many years

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.

https://cci30.com/

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]

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.

100% this! Me too!

 

[JohnnyDoe]

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.

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.

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

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

 

[wellington]

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.

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

 

[JohnnyDoe]

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

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.