The continuing debate over the debt ceiling has the U.S. in danger of being kicked out of a very elite club. Only 17 countries in the world, including the U.S., have a triple-A credit rating from both Standard & Poor’s (NYSE:MHP) and Moody’s (NYSE:MCO). The exclusive group includes Germany (NYSE:EWG), Canada (NYSE:EWC), France (NYSE:EWQ), Norway, Sweden (NYSE:EWD), and Switzerland (NYSE:EWL), among others, but none can boast an economy to rival the U.S. economy in size.
With both Moody’s and S&P reevaluating their U.S. credit ratings, the U.S. could soon be getting the boot. A downgrade would be much more than a blow to the United States’ reputation, but would increase the country’s borrowing costs. U.S. bonds (NYSE:TLT) have, until now, been considered safe investments because of the stability of the government and economy. The dollar (NYSE:UUP) has become the world’s No. 1 reserve currency for that reason.
However, as the U.S. economy continues to stumble, and the deadline to raise the debt ceiling nears with no solution yet at hand, investors in U.S. debt are becoming wary, and the cost to insure against a possible default has risen to its highest level since March 2009.
U.S. bonds are no longer the safe bet they once were. Investors would be wise to invest elsewhere, with Norway’s debt being the safest, followed by Sweden, then Switzerland, Finland, the Netherlands (NYSE:EWN), and Australia. Also coming in ahead of the U.S. are Canada, Singapore (NYSE:EWS), and Germany. If the U.S. is downgraded to a double-A rating, it would be joining the likes of China (NYSE:FXI), Spain (NYSE:EWP), Japan (NYSE:EWJ), Saudi Arabia, and Kuwait.