'Shark Tank' star Kevin O'Leary says US debt-rating downgrade means there's less faith in the dollar and Treasurys

• Fitch's US credit-rating downgrade means there's less faith in the dollar and Treasury bills, Kevin O'Leary said.
• This will push sovereign wealth funds to be weary of holding greenbacks, he told Fox News.
• "There's no way to sugarcoat this at all. It's bad," the "Shark Tank" star said.

It's impossible to view Fitch Ratings' downgrade of the US's sovereign credit rating in a good light, "Shark Tank" star Kevin O'Leary told Fox News. 

"There's no way to sugarcoat this at all. It's bad," he said Wednesday, adding: "Basically, when you downgrade the US economy — which is what this downgrading is — you are losing a little faith in the US dollar and the US Treasury bill."

The ratings agency slashed the country's long-term credit rating from AAA to AA+ late Tuesday, citing governance issues like the debt ceiling standoff as well as deficit and debt trends. 

"Really, this downgrade is about debt and the ability to pay it back. It looks beyond any one event. Doesn't matter: the more the government goes into deficit spending, the more rating agencies scrutinize the quality of that debt," O'Leary said.

This is the second downgrade the US has ever received, preceded by S&P Global's 2011 downgrade. 

According to O'Leary, the latest ratings drop will make sovereign wealth funds rethink their dollar holdings — a majority of their liquidity — and they could now be considering whether further downgrades are forthcoming. 

Effectively, the lowered rating also means a higher cost of borrowing for the US, which deepens federal deficit spending. American consumers should prepare to pay more too. 

"Now for me and you, or anybody at a kitchen table in America, your car loan just went up from 5% to somewhere between 7% and 9%. That's not going to help," he said. "So, the cost of your loan and your borrowing and your mortgage: going up — period."

Others on Wall Street downplayed Fitch's downgrade. Many analysts shrugged it off, with Goldman Sachs saying it "should have little direct impact on financial markets."

Meanwhile, JPMorgan CEO Jamie Dimon told CNBC, "It doesn't really matter that much." And Allianz's Mohamed El-Erian said it "is more likely to be dismissed than have a lasting disruptive impact on the US economy and markets."