Originally published at: https://peakprosperity.com/daily-digest/us-credit-rating-downgraded-enter-petrodollar-2-0/
Economy
Moody’s has downgraded the U.S. credit rating from “Aaa” to “Aa1”, citing rising debt and interest rates that are significantly higher than similarly rated sovereigns. This downgrade, the first since 2011, comes as the U.S. runs massive budget deficits, with the fiscal deficit for the year beginning October 1 already at $1.05 trillion, 13% higher than the previous year. Critics accuse Moody’s of becoming political, pointing to the timing of the downgrade being during President Trump’s term and not President Biden’s despite there being significant concerns at the time. The University of Michigan’s consumer sentiment survey indicates economic pessimism among Democrats, women, and low-income groups, with expectations of rising unemployment and inflation. Despite these sentiments, actual spending remains high. However, other rating agencies like S&P and Fitch still maintain the U.S. at their highest ratings, suggesting that the situation might not be as dire as some reports indicate.
Environment
U.S. beekeepers reported a loss of 55.1% of their colonies between 2023 and 2024. Bees, crucial for pollinating three-quarters of our food crops, face threats from habitat loss, pesticide exposure, and pests like the varroa mite. Efforts to support bee populations include planting native flowers, buying local honey, and advocating for bee-friendly legislation. Additionally, the European Union has moved to further restrict the use of neonicotinoids due to their detrimental effects on bees, providing an international perspective on regulatory responses to bee decline.
Energy
The U.S. grid is facing challenges with an influx of data center proposals, many of which are speculative or “phantom” projects. Utilities are dealing with five to ten times more interconnection requests than actual data centers built, complicating grid planning. Forecasts for data center load growth vary widely, with some predicting a significant increase in power consumption by 2030. Utilities are responding by implementing standardized processes and seeking regulatory support. Some utilities are also exploring alternative approaches like requiring substantial deposits for interconnection studies and ensuring data centers pay for infrastructure upgrades.
Economy
Jim Rickards, on Steve Bannon’s War Room, discussed the evolution of the petrodollar system into what he terms “Petrodollar 2.0.” This new agreement aims to strengthen U.S. ties with Saudi Arabia, ensuring oil is sold in dollars, which supports the dollar’s status as the world’s reserve currency. Rickards suggests this move is a strategic play to pressure China into reducing tariffs and aligning with U.S. economic policies. However, there are increasing transactions between Saudi Arabia and China in yuan, which could challenge the petrodollar system’s dominance.
Hapag-Lloyd, a major shipping company, reported a 50% surge in container bookings from China to the U.S. following a break in the tariff battle between the two nations. The company expects capacity to return swiftly, with plans to deploy larger ships to meet the demand. Despite the surge, some shippers remain cautious, citing the unpredictability of trade policies and the potential for sudden changes in tariffs or trade agreements.
A survey by Pollfish, reported by Resume.com, indicates that 65% of U.S. hiring managers have fired college graduates within their first year due to issues like excessive cell phone use, entitlement, and lack of workplace preparation. This trend suggests a gap between academic training and the skills required in professional environments, prompting calls for universities to offer more practical, job-ready training programs. However, some argue that the issue might not solely lie with the graduates but also with the expectations and training provided by employers.
US Politics
In Denver, there has been a reported 60% drop in homicides following ICE raids targeting foreign criminals, particularly members of the Venezuelan gang Tren de Aragua. Local politicians like Governor Jared Polis and Mayor Mike Johnston have opposed the Trump administration’s immigration policies, leading to legal actions against the city for obstructing federal enforcement. Some argue that the focus on immigration enforcement diverts resources from addressing root causes of crime like poverty and lack of education, potentially leading to long-term negative effects.
A segment of former President Joe Biden’s interview with special counsel Robert Hur has been released, highlighting Biden’s memory lapses, including forgetting key dates and details about his own administration. This has led to debates over his cognitive abilities, especially following the decision not to prosecute him for mishandling classified documents, a decision criticized by some Republicans.
Sources
U.S. Credit Rating Downgraded by Moody’s: A Signal of Financial Instability
Moody’s just downgraded its credit rating of the United States by a notch to “Aa1” from “Aaa”, citing rising debt and interest “that are significantly higher than similarly rated sovereigns.”
Source | Submitted by pinecarr
UMich Survey Reveals Deep Economic Pessimism Among Democrats, Women, and Low-Income Groups
The share of consumers expecting unemployment to rise in the year ahead increased for the sixth consecutive month and is now more than double the November 2024 reading and the highest since 2009.
Source | Submitted by Acorn Endeavors
Bees: The Unsung Heroes of Our Ecosystems Are Vanishing
Bees are dying—and at an alarming rate.
Hapag-Lloyd Reports 50% Surge in China-US Container Bookings Post-Tariff Break
Hapag-Lloyd saw container bookings from China to the United States jump by 50% following the break in the tariff battle between the trading partners.
Survey Reveals: College Grads Struggle in First Jobs Due to Lack of Workplace Skills
“Colleges don’t teach students how to behave in the workplace, and there is a lack of transitional support from both universities and employers.”
Data Center Deluge: Utilities Grapple with Phantom Proposals and Grid Planning
Conservatively, you’re seeing five to 10 times more interconnection requests than data centers actually being built.
Jim Rickards Discusses the Emergence of Petrodollar 2.0 on Steve Bannon’s War Room
“The U.S., by strengthening its relationship with Saudi Arabia, and creating Petrodollar 2.0, puts the pressure on China to reduce their tariffs and meet Trump’s requirements. Otherwise they don’t have a source of dollars.”
Denver Sees 60% Drop in Homicides Following ICE Raids, Despite Political Opposition
“Violent crime is just about reducing in every city, but we were the city in which it had declined the most,” said Denver Police Chief Ron Thomas.
Biden’s Memory Lapses in Hur Interview: A Closer Look at the Controversial Tape
“Biden couldn’t remember details such as when his son Beau died, when he left office as vice president, what year Donald Trump was elected, and why he had classified documents in his possession that he shouldn’t have had.”
Moody’s Downgrades U.S. Credit Rating Under Trump, Ignores Biden’s $5 Trillion Spending
Moody’s is now officially a political agency, not a credit rating agency.
In addition to sources submitted by community members, the following were also used in the creation of this report: American Public Power Association, CNN, The Denver Post, The Financial Times, The Guardian, Great River Energy, Reuters.