The collapse of the West and rise of Asia - Update Aug - 09

09 August, 2011

Downgrading the US credit rating
On august 5th 2011, for the first time in history the United States' top-notch AAA rating was downgraded to AA + by Standard & Poor's agency. The agency itself being based on USA, the decision to downgrade was because of inevitable circumstances.  It was reported that S & P had even consulted president Obama and explained the decision before publishing the new ratings.

Ref: http://www.bbc.co.uk/news/world-us-canada-14428930

Collapse of US share market
With the news of downgrading of rating, the US share market started to collapse further. It was followed by collapse in European share market. Asian Share market was also effected, but in lesser extent.

Ref: http://money.cnn.com/2011/08/08/markets/markets_newyork/index.htm/?hpt=hp_t1

USA – no longer an economic super power
Now USA can no longer say they are a super power in economy!! USA never came out of recession that started in 2008. Though it showed temporary stability in last year, the collapse has again started. Now western economist has start calling it double dip recession. But the reality is what is happening now is not a temporary recession, but permanent down fall of USA lead western economy in the rise of Asian economy led by China and Japan.

Reaction from Russia
Some western economists try to interpret the crisis of the west as a global economic crisis. But the reality is there is no economic issue in rest of the world. It’s a crisis of USA and the Western Europe alone! It is on this context that Russian PM Vladimir Puttin called USA country having a parasite economy.

Ref: http://www.nydailynews.com/news/world/2011/08/03/2011-08-03_russian_prime_minister_putin_calls_american_economy_parasites.htmlv

Reaction of China
"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone. China, the largest creditor of the world's sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets," Chinese official news paper Xinhua said. So it is very clear that China has already taken the cane against its big debtor USA. Now it is time for the USA to dance to the tune of China.


Ref: http://www.businessinsider.com/china-debt-addiction-short-sighted-2011-8

The role of India
India is set to fund bailouts in financially-stricken Europe, marking a dramatic role reversal from 20 years ago when it went knocking on the doors of the International Monetary Fund (IMF) to avert a balance of payments crisis. The Indian government last week sought parliamentary approval to provide over Rs 9,003 crore (over $2 billion) in loans to the multilateral agency's New Arrangements to Borrow (NAB), a fund whose corpus was raised to over $500 billion in March when the debt crisis in Europe showed no signs of abating.

Ref: http://articles.timesofindia.indiatimes.com/2011-08-03/india/29846212_1_bailouts-economies-debt-crisis

Riots in UK
In last few days, riots are reported in London. It started over an alleged killing of a person. But people are now using it to turn anger and frustration against government. People have set large number of government and private property on fire. There are reports of looting as well. People in London under goes severe economic hardship and no wonder looting are going to be a normal thing in streets in London in the future. As usual Western media is trying to cover the pathetic situation from the international community. 

Ref: http://www.dailymail.co.uk/news/article-2023254/Tottenham-riot-Mark-Duggan-shooting-sparked-police-beating-girl.html

Now it is crystal clear why international rating agents have ranked London lower than Colombo in ratings for security. Now looting, bomb blasting and looting is becoming a normal phenomenon in the Europe which used to be in Asian countries.

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