India story is good, what about world?

A downward correction is likely soon, as the Sensex bangs its head against the level of 6044, to which it had climbed, from last weeks closing of 5964, before starting its descent, to end the week at 5961. It is likely to be led by technology stocks.
Whilst the India story looks good, (foreign investors have invested some Rs 8,000 crore in the last 82 days), the concerns are global.US consumers continue to party on other people’s money, thereby helping exports from other countries. This, as Alan Greenspan, the Federal Reserve chairman, recently pointed out, can’t continue.
The deputy chairman, Bank of Russia, Oleg Mozhaiskov, in a speech to the London Bullion Association, said the net debt owed by the US to the outside world (the so-called "international investment position�) is in the region of $3 trillion. According to statistics by International monetary Fund (IMF) at last year-end, the world pool of foreign currency reserves totalled SDRs of about $2,800 bn.
Now if creditor nations to the US start to switch even a part of the currency held by them in $ to another asset, such as gold, there would be a huge fall in the former and a rise in the price of the latter. China, for eg, holds about 2 per cent of its $474bn foreign currency reserves.
What would happen, then, to the inflows of foreign investment (Rs 8,000 crore in past 82 days, remember?). If a large chunk of this were to exit abruptly, would there be institutions to absorb it or would it have volatile repercussions? Amongst domestic institutions, the big Daddy of them all, UTI, has a much reduced clout now, with private sector mutual funds having grabbed a lot of it. However, as per recent media reports, this increased market share has come largely from the corporate sector, investing their surpluses, and would be subject to fast withdrawal on signs of distress or in case of need.
So, a weakness in the US currency, alongwith a shock to China from de-pegging its currency from the $, could trigger a correction.
So could higher oil prices, which have started inching upwards, as winter approaches. A disruption in supply caused from a number of events (a mess in the way Yukos’ main facility is sold, or terrorist action, eg) could cause oil prices to spike again.