Dollar Debasing from Gold Standard : President Nixon

President Nixon declaration of debasing dollar,

It was on this vary day, when President Nixon ended the Age old ‘Gold standard’ valuation of dollar and debased it, to the Fiat Dictate of the Political Rulers. He claimed for 7 International Currency Volatile situations in as many Years and Blamed all that, on the International Monitory Speculators and justifies the action for American Jobs and Inflation. He added an 10% Import tax, to benefit, the American Producers.

The Background for this action was ‘ Vietnam ‘ war and the Misery, And protest ensued.

Well ! The debasement of currencies saw big Volatility in the Gold Prices and bottom in the 2004, there about. The many wars and Alan Greenspan’s Policy tweaking saw Gold rising and falling in a Narrow Grove for many Years.

It was always ignored and Dollar Importance remained. More so due to American Dominance.

International Monitory Fund, remained on the side walk. All Countries followed this ‘ Disorder’ in Great Happiness. The International currencies Trading has now become the Trading Bets and Currencies traded in Derivatives, ETF’S and All Kind of Fictitious Products, for so Called ‘ Hedges’.

The Clock is slowing turning Back to 14Th August 1975…?

Sovereign Down grading War Among Rating Agencies. Japan Next ?

Standard & Poor's Ratings Services on Monday lowered the ratings on U.S.-guaranteed bonds issued by the Israeli government to AA+ from AAA. The downgrade comes in the wake of the ratings agency's move on Friday to strip the U.S. of its triple-A rating. However, Israel's sovereign rating is unchanged at A with a stable outlook. The decision affects about $6 billion in debt.




















 In connection with its downgrading of the U.S. government, ratings service Standard & Poor's early Monday likewise downgraded the senior issue ratings on Fannie Mae and Freddie Mac to 'AA+' from 'AAA'. S&P added it was maintaining its 'A' subordinated debt rating and 'C' rating on the preferred stock for the government-backed entities, and affirmed their short-term issue ratings at 'A-1+'. "The downgrades of Fannie Mae and Freddie Mac reflect their direct reliance on the U.S. government. Fannie Mae and Freddie Mac were placed into conservatorship in September 2008 and their ability to fund operations relies heavily on the U.S. government," S&P said, in a statement.


President Barack Obama will make a statement has more a historical and Political View Point. 


White House In Denial Mind Set and Blurred Vision.


While, Moody's Have warned Japan for the Rating Down Grade And it is widely, expected to Sooner than Latter.


Heard on the Street, is down grading War between Rating Agencies, may start soon. May Be Wednesday..?

US Default effect on Asia, Latin America, Poor countries

Scenario                                                                   

Standard and Poor's, Moody's and FITCH   revises the ratings on the U.S. to ‘SD’ (selective default) and then raise them to ‘AA/A-1+’ with a negative outlook.

 A few weeks later....

In this scenario,1) Expect a systemic market disruption to follow the revision to 'SD', which would have a significant impact on ratings in the financial institutions sector.

2) If a selective default occurs, but without a systemic market disruption, 

 expect this scenario to have less of an impact on global financial institutions ratings.

• Asia-Pacific: 

  
  The region's financial sector might experience more pronounced funding difficulties in this scenario . These could be associated with market disruptions that could result in costlier funding that could erode profits, while smaller market participants might experience difficulties in refinancing maturing debt. More exposed to a prolonged disruption could be Australian, Korean, and Japanese banks that have some dependence on offshore funding markets. Thus, the impact of a dislocation in global funding markets would be high.  Banks that have previously benefited from strong government support would receive support this time around as well. Asia-Pacific banks and insurers would also feel the impact on their marked-to-market assets on their balance sheets and pressure on market-dependent income. The overall impact would hurt earnings for some, and  couldn’t rule out downgrades for smaller players. ( Contagion Effect )
  
  It’s also important to remember that China and Japan are large holders of U.S. debt securities. The immediate disruptions in global markets would be unlikely to cause a substantial hike in official interest rates in China and Japan--if authorities there moved quickly to maintain confidence. Both countries would likely experience repatriations of funds deployed abroad plus a flight to quality--which, to a degree, should help the largest banks (the expected recipients of such funds) deflect funding pressures.
  

  Latin America

  
  Finance companies are more sensitive than other companies in the region to liquidity shortages because of links to debt market funding requirements and our expectation that banks could close credit lines. Additionally, an economic impact similar to the one in 2008 and 2009 could hurt asset quality and profitability for some finance companies. The ratings on issuers in other sectors in Latin America are not directly tied to the U.S. sovereign rating, which may help limit the number of rating actions.

        I.M.F., W.H.O. and other so many Associtions may find huge difficulties, is an separate issue....