Monday, August 1, 2011

Will Super Heroes be there to save America on 2nd August?

Will the real superman please stand up. America needs you now to assure the world that there will be no default on dooms day. Even if the United States can escape a default (which I'm 90% sure they could), a downgrade of its AAA credit rating seems inevitable. I have put together a few scenarios that will happen and the consequences or favors that will impact the nation and the dollar. All these are based on my analysis and at the end I will even pick the most likely scenario that we will be seeing.

The Ronald McDonald's Scenario : U.S doesn't default and no credit downgrade
It's a good sign and of course everyone in America will be laughing as hard as Ronald Macdonad. If that really happens, we can see the dollar rallying against all major currencies and previously safe haven currencies like the yen and swiss dollar might no longer be where it was.

The Saving Private Ryan Scenario : U.S doesn't default but receive a credit downgrade
I'm absolutely sure that America will not be defaulting but it might be possible to received a credit downgrade of maybe to AA. Say if the rating becomes AA+, there will still be massive selling of the dollar. It would still be gloomy and with all due respect it would be easier to win a war than to get the currency back on track.

The Armageddon Scenario : U.S defaults and received credit downgrade
This is a scenario that I would hate to see and I know it won't happen. Period. If it really does, I will shoot myself with a gun and buy all the NZD / AUD / CHF & YEN for my wife. Well, I chose not to emphasize so much on the Euro as they are having libido problems themselves and it would be wiser to lock more profits with the other 4 currencies (NZ,Australia,Canada are not facing any major problems at the moment).

My Pick : Ronald McDonald's Scenario
So we know there will not be any Armageddon but which of the other 2 scenarios are likely to happen? U.S is the largest treasury in the world and I just don't see themselves falling so easily. The world economy still mainly evolves around the dollar and seeing it crumble will do no good for the rest of the countries either.

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