Tuesday, April 19, 2011

What if the USD was downgraded?

Class of AAA

Class of AAA © fintag

News comments:
What if the USD was kicked out of the AAA club?

Lots of noise yesterday but little movement in the USD. You see the USD is a special currency in which all other currencies are effectively benchmarked. USD is what gold used to be. Think of a Mercedes Benz. It has for decades been the gold standard of car quality. Think of Apple. It has for the last few years been the design standard of PDAs. And so on. They all have one think in common; a time period of excellence before they get overtaken or taken out. The USD has been propping up countries since the second world war but its time maybe running out. If the USD was downgraded and looking at the economics should be on the same rating as Ireland or Greece, what would happen next?

If we look at the current members of the AAA club, we notice there are lots of small countries. How can the Isle of Man have the same rating as the USA? Anyway, if Germany and France kicked out all the reprobates of the Eurozone and joined up with the UK, I think it would have a good chance of upending the USD as top dog. If the Netherlands, Canada, Denmark and Sweden were added to this AAA club along with Australia this new currency to be called the AAA would be pretty awesome. Problem is it will never happen. So what is the alternative to the USD?

You tell me because I haven't a clue.

Today's shorts:
Bernanke fails to get off his meds (bloomberg)

Today's longs:
MEE says there is no alternative (reuters)

Super injunction actor isn't XXXXXXXX from star wars.