Major press release: Weiss Ratings rates U.S. credit!

I am about to send out the single most important press release of my lifetime, and I want you to be among the first to get this vital information:

Starting today, Weiss Ratings is issuing ratings on the credit worthiness of sovereign nations. And we have given the U.S. a rating of C, just two notches above junk.

We rank it 33rd among the 47 countries we cover. China, Thailand, and Malaysia get much higher ratings. Even the government finances of the Philippines, Indonesia, Bulgaria, and Mexico are stronger than ours.

Only a handful of countries get a lower rating than the U.S., including, as you might expect, Ireland, Greece and Portugal.

In a moment, I will give you the ratings. Then, I’ll invite you to hop on my blog or Facebook page to give me feedback, ask questions and get my responses. But first let me tell you what you must do about it — urgently:

• If you own medium- or long-term government notes and bonds, dump them immediately.
• If you have your cash in short-term U.S. Treasury bills, be sure to surround them with investments that go up when the U.S. dollar falls.
• And if you wish to profit from this crisis, consider adding still further to those contra-dollar investments.
• Most important, get ready for turmoil in global markets caused by the Fed’s follies and Washington’s inaction.

We Are Taking This Action for Four Vital Reasons:

First, the AAA/Aaa assigned to U.S. sovereign debt by Standard & Poor’s, Moody’s and Fitch is fundamentally unfair to anyone who invests in U.S. government securities. It fails to warn you of real dangers. And it helps keep your yield far too low to compensate for the risks you’re taking. Investors urgently need a more honest rating.

Second, their AAA/Aaa U.S. debt rating is also unfair to you if you rely on interest income to help meet daily living expenses or finance your retirement. Since nearly all U.S. interest rates — including rates on bank CDs, annuities and other instruments — are tied to U.S. Treasury yields, you and millions of other investors are being severely underpaid, virtually across the board.

Third, their recent commentary regarding the future of their AAA/Aaa rating is ambiguous and unclear. As long as they continue to reaffirm their triple-A ratings, any statements they might make are entirely inadequate to warn or protect you.

Fourth, their AAA/Aaa U.S. debt rating has helped foster political resistance and gridlock in Washington. If they had only issued a fair rating years ago, it could have played a pivotal role in helping lawmakers and policymakers take earlier remedial steps.

Today more than ever, we need an honest rating for U.S. government debt to help provide public support for the political compromises and collective sacrifices we must make in order to restore our nation’s finances.

Big Risks for Washington

Our C rating signals grave risks for U.S. policymakers. Unless they make an about-face in a timely manner, a further deterioration in the nation’s finances will trigger a series of events beyond their control:

The dollar will lose its status as a reserve currency.

Global investors, already dumping the U.S. dollar, will dump U.S. bonds in panic.

They will demand draconian cutbacks in U.S. government spending. And these cuts, in turn will bring a vicious cycle of economic declines, larger deficits and further investor demands for even greater cutbacks.

It will be very ugly. We must not let it go that far.

But our C rating also means that, while investing in U.S. treasuries is far riskier than you’ve been told, the ultimate crisis I have just described is NOT here yet! And until it is, our leaders DO have an opportunity to take action.

For the Weiss Sovereign Debt Ratings on the 47 countries we cover, go here.

Then jump over to my blog or my personal Facebook page to give me your comments and questions. I will do my very best to answer as soon as I can.

Good luck and God bless!

Martin