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US economic politicians have simply downgraded the economic strength of US through the on going tussle over the debt ceiling limit hike. Negative sentiments have become the smell over the US FED and on the government hold treasury cakes. The US government may be able to cook the grading systems of its treasuries but for the world market it’s no longer ‘Thanks Eyan’ cake. US is going to face one of the worst phase of its time may be lighter than The Recession of 2008 but a deeper one. US and dollar are going to have the worst affect due to tussles of US politics.  

Chinese rating agency Dagong Global Credit Rating Co. said Wednesday it has cut the credit rating of the United States from A+ to A with a negative outlook after the U.S. federal government announced that the country's debt limit would be increased. Since lifting of the debt and the ongoing war of US politics have shaken trust on the debt re payment capacity and strategy outlook of US. The wars of politics of US over the debt limit have made the world economy to understand that Us economic policies and its dollar is no longer to be taken for safe heaven. Its policies will be convoluted and its affects will be reflected over the dollar which is an international currency for trading.

I think this might be the right time for China to float its currency for becoming trading currency. In fact we might see this happening within the next 5 years if I go for a long term bet. There are no reliable or feasible policies put in place to support the US country's plan to cut federal spending had spooked investors across the world to invest and shift their investments from dollar based to gold. This is one of the prime reason for gold prices to climb and in the coming days gold will replace dollar if not “Renmbi”.


An even investment advisor across the world has asked its inventors to overlook US and do investments in emerging economies. They have argued in client meetings, not only has growth in China and Brazil been strong while the U.S. and Europe have limped along, but investors still haven't indulged adequately in emerging stocks and bonds, given the tremendous expansion of developing markets. By this time emerging markets have declined about 5 percent since April, China funds have declined about 5 percent during the last 13 weeks, according to Lipper, and Latin American funds have dropped about 6 percent. So a question will come up where to invest funds .In fact the ans is simple as long dollar will continue to disturb the world economy other than the Yellow Metal there is no place to park funds in currency format.

Inflation number and interest rate hikes in emerging economies have resulted these economies to be less growth opportunistic mines as compared to gold. Industrial activity is declining throughout the world, including the U.S., euro zone, United Kingdom, China, Brazil, and Taiwan. As result growth form investments in these economies will be less as compared to investment and trading over Gold. I think time has come to reward those economists across the worlds who have remarked that some time gold will replace all currencies. There hard worked out theories have seen the truth of today.

Moreover investments needs to find new avenues but new avenues will come from hard thinking from the minds of the economist across the world .I think we economist should stop thinking about economic growth through pumping funds. We should try to develop new areas of investments for the coming decades on this planet. By the way to finish the article and also to continue writing in my next article, gold will be the next trading segment where as commodity market will be many times bigger than the stock market in coming days in emerging economies.

For your knowledge I would like to conclude that US has already hiked the debt ceiling of US which counts to be  the 79th time in half a century.

Published by

Indraneel Sen Gupta
(Vice President-Business Development,Research & Product IFAN Finserv Private Ltd.(SPA Group Company) )
Category Others   Report

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