Key Points:
- Moody’s cuts U.S. credit rating from AAA to AA1, citing ballooning debt and rising interest payments.
- Downgrade signals higher borrowing costs, possible recession, and increased risk for investors.
- Robert Kiyosaki compares U.S. fiscal policy to a “deadbeat dad” and warns of a looming depression.
- Kiyosaki urges investing in gold, silver, and Bitcoin, not fiat currency or ETFs, to protect wealth.
- He believes downturns create opportunities for entrepreneurs and asset buyers.
New Delhi: In a move sending shockwaves through global markets, Moody’s has downgraded the United States’ sovereign credit rating from its top-tier AAA to AA1, the first such cut by the agency in over a decade. The downgrade comes amid mounting concerns over America’s spiraling $36 trillion national debt and the government’s inability to rein in spending and interest costs. Moody’s cited that U.S. debt and interest payment ratios have reached levels “significantly higher than similarly rated sovereigns,” warning that the country’s fiscal path is increasingly unsustainable.
This marks the third time a major rating agency has lowered the U.S. credit rating, following S&P’s downgrade in 2011 and Fitch’s in 2023. The immediate market reaction included a sharp sell-off in stocks and a spike in Treasury yields, with the 30-year bond piercing the 5% mark for the first time in years.
What the Downgrade Means for Americans
The downgrade is more than a symbolic blow. It signals to investors that U.S. government debt is riskier, prompting demands for higher interest rates on government bonds. This ripple effect could mean higher costs for mortgages, auto loans, and business borrowing, as well as increased inflationary pressures. Moody’s noted that unless there are substantial changes, the cost of servicing the debt could soar from 9% to 30% of federal revenue by 2035.
Kiyosaki’s Dire Warning: “Deadbeat Dad” America and the Threat of Depression
Renowned financial educator and “Rich Dad Poor Dad” author Robert Kiyosaki reacted sharply to the downgrade, likening the U.S. to a “deadbeat dad” recklessly spending borrowed money without a plan to pay it back. He warned that the downgrade could usher in a period of higher interest rates, recession, rising unemployment, and even widespread bank failures echoing the devastating crash of 1929.
Kiyosaki has long predicted a major financial crisis, referencing his 2013 book “Rich Dad’s Prophecy,” where he foresaw a catastrophic market event triggered by runaway debt and an unstable retirement system. He believes the current environment—marked by record-high credit card debt, surging unemployment, and shrinking retirement savings—could lead to what he calls a “Greater Depression”.
Investment Advice: Gold, Silver, and Bitcoin Over Fiat
Kiyosaki’s message is clear: “Don’t rely on fiat money or government bailouts. Instead, protect yourself by investing in real assets like gold, silver, and Bitcoin”. He argues that physical assets offer security in times of crisis, unlike ETFs or traditional savings, which he calls “fake money”. Kiyosaki also sees downturns as the best time to become wealthy, urging people to think like entrepreneurs and seize opportunities in real estate and undervalued assets.
“A depression can be the best time to become rich… if you open your eyes and start seeing through the eyes of an entrepreneur, rather than an employee clinging to job security, steady paycheck, and a crashing 401k.” — Robert Kiyosaki
The Broader Economic Outlook
While some experts dismiss the downgrade as a lagging indicator, others warn it could mark the end of an era when the U.S. could borrow without consequence. With policymakers facing limited options to reverse the debt trend, the risk of sustained higher interest rates and economic stagnation looms large.
Moody’s downgrade is a stark warning about America’s fiscal health. As fears of a recession and even a depression grow, Kiyosaki and other financial experts urge individuals to protect their wealth with tangible assets and entrepreneurial thinking, rather than relying on traditional savings or government intervention.
