Quote:
Originally Posted by JC
Oh well, the solution is always the same, make more money.
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This is exactly what has been happening for the last few decades.
Americans demand cheap goods from other countries, which are paid for in US dollars. US dollars are valuable because of this vast trade, so other countries invest in dollars by buying up american debt. The trade keeps the value of the dollar high, which keeps the imports coming, etc etc.
When the terms on these loans come due, they are usually paid for with the next round of money coming in. Essentially the US has been surviving for decades on a never ending series of loans. And that is fine, as long as the rest of the world wants US dollars.
But if other countries start trading in euros instead of US dollars (which will happen if it keeps falling) then the US economy is done. The flow of "free" money into the US from investors like Japan and China will stop. Instead of paying these loans using new loans, what will happen when the supply of new money dries up?
This is essentially what happened to
Argentina 8 years ago, and it had to start borrowing more money to pay old loans and society basically collapsed.
If OPEC switches to the euro then it will be twice as bad, because oil is the one import that america truly can't do without.
I think the management of this country has been very poor, and not just over the last 8 years either. Instead of reducing debt and dependence on imported oil, america has been increasing debt and using the money to finance military operations to secure that oil flow, a short term solution at best. You can't get voted in if the voters can't afford their retarded sized SUVs and monster trucks!
I know it sounds gloomy, but don't worry! I keep the cost of a one way airfare out of here in my bank account, just in case
