End of $ Domination?

During my one year stay in Baghdad was a most irritating one, not because it was a worst destination to stay over but because I was not having any financial independence. Iraqi dinar was not having any face value and so my salary  has to transferred to home via some other gateways, thank god I was working for a multi-national company and not for an Iraqi company. Whatever we needed to stay afloat in Iraq we took home and rest we send home either via Dubai or via Saudi Arabia. We hardly took a chance to keep extra bit for our necessities. It happened always, whenever we set out, we needed handful dollars,  therefore, we always preferred to measure the currencies from different part of the world with dollar but in future thing may be not as same as it was. End of dollar domination with the downgrading of US Government credit rating from the top level 'AAA' to the AA+ category by credit-rating agency Standard & Poor's (S&P.). Agencies also threaten to degrade the listing of the United States one step (from AAA to AA+  from Standard & Poor’s from AAA to Aa1 from Moody’s), in the next three months if the debt ceiling is raised in the short term, but a consensus is reached.

 What is credit rating?

Bond credit rating assesses the credit worthiness of a government debt issues. The credit rating is a financial indicator to potential investors of debt securities such as bonds.

Standard & Poor

In 1941, Henry Varum Poor's H.V and H.W Poor company merged with Luther Lee Blake founded the Standard Statistics Bureau and to become Standard & Poor's Corp. In 1966, the company was acquired by The McGraw-Hill Companies, and now encompasses the Financial Services division. The big three ratings agencies  are Standard & Poor, Moody's, and Fitch.

Where India stand

There is an Indian touch in America’s credit-rating degrading, the S & P chief is an Indian-American but what will be the impact on Indian economy.

Union Finance Minister Pranab Mukherjee described the downgrading of the US government by a credit rating agency as a "grave situation" and said it has to be analysed. This comes a day after, in India, the BSE Sensex plunged more than 700 points before recovering partially with investors selling across the board.

Exports of garments, handicrafts, leather, gems and jewellery and IT are likely to be the most affected, the Federation of Indian Exporters (FIEO) said. Most of India's $50 billion of IT and services exports end up in the US.

The other side of the downgrade is that it may encourage more investment to flow to countries like India. India has seen a drop in long-term foreign investment from around $35 billion two years ago to $25 billion last year.

Country	Oct 2010.	Oct  2009.	Oct 2008.
1	China	906.8	938.3
2	Japan	877.4	742.9
3	U.K	477.6	105.7
19	India	41.1	35.8

China is topping the groups, currently has more than 1000 billion dollars of U.S. Treasury bonds.  If China decided to sell immediately but there would be no buyers. India ranked 19 with about 50 billion dollars.

!!!This piece is a teaser,  by 2050,  `1 equal to $76, hard to believe but may be a reality.!!!