The US being downgraded from AAA to AA+ is being touted as a huge and big event impacting the world economy. It is exactly like a cancer patient in ICU dying. Yes if he is a relative, the eyes do get moist. If he is very close, you might even feel devastated. However the day the patient was discovered as a cancer patient – and there was no cure should have been the day to feel devastated. Dying was inevitable, no?
The US was and continues to live far, far beyond its means. Downgrade is a logical consequence of spending much more than your income – surely even my grandmother knew it.
Implications for the world economy is difficult to calculate. If American companies slow down, Indian companies like Infosys will see a hit in their earnings. Of course a weak dollar is also not too great a news – unless you use the dollar to buy assets in the US. It is also a time when the markets will tank and there will be a good opportunity to buy…
Good dividend yield shares giving 4-5% returns look like a good buy….
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