THEME: THE DOLLAR

But senior officials say India's reserves, which have almost tripled in the past three years, are more than enough to cover any exchange rate shock, amounting to almost 20 months worth of imports.

In addition, India's record foreign exchange reserves represent a large “opportunity cost”, they say, since most of the money is invested in low-yielding US Treasury bonds. “We are subsidising the American economy,” said one official. “These are scarce resources that can be put to better use.”

India is not yet one of our top creditors. However, this view of the inherent unworthiness of the US dollar is a risky one because if it spreads to China and Japan, then we'll be in serious trouble.

The crashing dollar is a disaster scenario that will happen if our national leverage is not reduced. There is hope from the Kerry camp, and there is nothing but fear & despair from the Bush camp.