As night follows day, this higher risk profile has invited credit downgrades. In the last six months, Moody’s, S&P, and Fitch have all downgraded El Salvador’s sovereign-debt rating, pushing it into speculative territory — junk, and rightfully so. Not surprisingly, since the Bitcoin law was implemented in September 2021, the price of the Salvadoran dollar-denominated sovereign bond due in 2025 has plunged by 48 percent. Today, Bloomberg Economics lists El Salvador as the most likely country in Latin America to default on its debt.
The verdict is in on Bukele’s Bitcoin experiment. It was based on false promises from beginning to end. A total failure.
Senate Democrats insist that the act’s clean-energy investments will set the U.S. up for a 40 percent reduction in carbon emissions by 2030, largely through “targeted federal support” — i.e., subsidizing producers and purchasers of federally approved eco-friendly products. But the fine print tells a different story. True, the act promises tax credits and grants to buyers and makers of electric vehicles, solar panels, and other green tech. It also shunts $3 billion to the United States Postal Service for the “purchase of zero-emission delivery vehicles” and requisite charging infrastructure.
The problem is that key elements in our green tech — including electric-vehicle batteries and charging equipment, materials for solar panels, and even hand-held electronics — are sourced from China, a country not known for its friendliness to the environment (it is the world’s leading emitter of CO2) or the U.S.
On this week’s episode of the Capital Record, David Bahnsen talks to Stephen Miran, lead portfolio manager at Amberwave Partners and a former Treasury economist. Listen here, or wherever you get your podcasts.