The Standard & Poor's downgrade of the U.S. economy was the great unthinkable just a few months ago. They are now a stark reality. While the short-term impact may not be immediate - save for market gyrations, it is long-term implications are clear: the U.S. economy is no longer the safest, the most dynamic and the most enduring in the world, and U.S. Treasuries - may be not tomorrow but certainly over time - will no longer the safe havens everybody counted on.
The Gulf states which have aligned themselves to the greenback in more ways than one, also need to think radically outside their dollar-filled box. While analysts don't expect Gulf states to publicly speak negatively about the U.S. economy or the dollar, one certainly hopes that behind closed doors, there is a concerted hope to realign the regional economies to the new realities.
Standard & Poor's damning verdict of the United States' approach to its fiscal crisis came after the markets had closed. It didn't matter as investors had been sensing a downgrade all week and moved like a pendulum on steroids, lurching from one piece of speculation and hanging on to every scrap of good news.
No comments:
Post a Comment