Millionaire Chamath Palihapitya says the United States’ credit rating downgrade by Fitch is “irrelevant”

The recent downgrading of the country’s credit rating is no reason for fear, according to billionaire venture investor Chamath Palihapitiya.

The United States’ long-term credit rating was lowered by Fitch on August 1 from AAA to AA+ with a stable outlook.

According to Palihapitiya, the United States economy is still the strongest in the world, thus nobody should pay heed to Fitch’s new decision.

“The second, and more crucial, point is that none of you who are always panicking about this really grasp the nature of the discussion at hand, which is grounded in relativity. You’re dealing with absolutes, yet all of these discussions are relative. Japan’s debt to gross domestic product is at 270% and rising.”

“We dominate the international economy. It will remain the world’s preeminent economic power, and from where I sit, every other nation is doing worse economically than the United States.”

According to Palihapitiya, there is no viable replacement for the US dollar in the foreign reserves of national central banks throughout the globe.

As a central government, what do you do if you need foreign currency reserves? Do you decide to increase your bets on the euro all of a sudden? To double down on the yuan would be to double down on the US currency.

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