I cannot quarrel with Prof.Paul Krugman, being his Fan. However, I might differ with Him

Prof.Paul Krugman in his recent article has argued rightly that although American economy is in a state of mess, the grounds on which the S&P rating agency has downgraded the U.S is fundamentally flawed and that some $2 trillion error has also taken place in their calculations. I am a fan and ardent admirer of Paul Krugman. Indeed after Harrry.G.Johnson , I have developed a spontaneous affection for Krugman although I like many economists like Ronald Mc Cannon, late Dorn Busch, Schiller, Roubini, Joseph.E.Stiglitz and many others. In my blog, posted yesterday I had revealed my happiness over the downgrading of U.S by S&P, not because the latter was right but mostly because many things have gone wrong with U.S for so long and that U.S is still thinking that it can enjoy an unlimited credit card at a ridiculously low rate of interest on its treasuries. The difference of opinion or rather contradictory perspectives between Krugman and me are only are only notional and marginal and not real. I never had any respect for any rating agencies in the financial world. Krugman also observed in his latest article that S&P continued to give a high rating to Lehman Brothers even one month before its demise .The president of the U.S is also optimistic that fiscal situation is sustainable and that U.S will continue to serve as a safe haven over international investors. In the last forty years of my academic life, I have heard enough of this music and I am tired of it . In the recent times perhaps the political differences over the debt ceiling and the consequent downgrading by a rating agency may have caused the current Dollar crisis . Even Krugman argues that with huge debt Japan continues to enjoy a low rate of interest .It is high time that economists and top politicians in the world listen to the noise of the Gold, which has become so nasty from the common man’s perspective .From $35 per ounce Of Gold in 1971 Gold has moved to more than $1650 per an ounce, giving a clear red signal that the faith in the fiat currency is fully eroded and Dollar cannot that easily regain the confidence. There are speculative tendencies that gold price will escalate still further and that does not augur well for the inflation front. Continuing asset bubbles in real estate and gold market are clear indications that we have lost control over money and that the absence of an anchor currency will unleash a lot of misery to the vulnerable population of the entire world .Tackling recession, very deep recession by Keynesian spending cut has not solved the problem for again, as Krugman ha pointed out in one of the recent articles that rate of unemployment is high in U.S. One can very well imagine the condition in poverty stricken countries of Asia and Africa .

In a globalised environment, financial markets do more mischief and they spill over into real sector. In the near future there is no alternative to fiat currency excepting a commodity called gold , whose monetary status was eliminated long ago . Ever since Asian financial crisis ,we have been talking about reconstructing international financial architecture but very little is done on the practical side . This vacuum is understandable. Now there is not just crisis in macro economics but there is a real, deep crisis in politics, environment and the very economics itself . Indeed it is very much distressing that, many are not aware of the grave danger lying ahead.