America's Superpower Status Coming to an End

Newsmax.com ^ | 3/1/05 | Paul Craig Roberts

[beyond the sea]

The U.S. economy is headed toward crisis, and the political leadership of the country – if it can be called leadership – is preoccupied with nonexistent weapons of mass destruction in the Middle East.

The U.S. economy is failing. The afflictions are serious. They could be fatal even if diagnosed and treated. America is losing the purchasing power of its currency and its ability to create middle-class jobs. Story Continues Below

The dollar's sharp decline and projections of continuing trade and budgetary red ink are undermining the dollar's role as reserve currency. A number of central banks have announced that they will be diversifying their currency holdings and will not be buying dollars at the same rate as in the past. This will put more pressure on the dollar. At some point, the flight will begin. Instead of buying fewer dollars, central banks will sell dollars, hoping to get out before the dollar hits bottom.

Suddenly, the advantage of being the reserve currency becomes a nightmare, as the world's accumulations of dollars are brought to market. An enormous supply and weak demand mean a very low exchange rate for the once almighty U.S. dollar.

Overnight, those cheap goods in Wal-Mart, which are the no-think economist's facile justification for Wal-Mart's decimation of communities, small businesses and employment, shoot up in price.

[Lancey Howard]

The sky is falling again....

[TheOtherOne]

Who are we paying interest to on our national debt

Uhh, whomever buys it.

[John Lenin]

20 years ago we were getting close to having to pay the IOU for government largess, the 20 years are over and the IOU's are coming due.

[beyond the sea]

But you are nevertheless worried about a plan by people you have no idea about. Seems a little silly, don't you think?

Yes, come to think of it. ;-)

[TheOtherOne]

Yes, come to think of it. ;-)

Well don't worry, you don't know who I am...but I have a secret plan to counteract their secret plan. All is secure.

Stay Safe.

[beyond the sea]

but I have a secret plan to counteract their secret plan. All is secure.

Aaah, I can sleep now. Thanks. ;-)

[TheOtherOne]

This is not the plan

...but be sure to microwave your US currency just to be safe!

[demecleze]

North America will just be North Mexico in 50 years anyway.

I think it is 2 million illegal aliens a year is it not?

[Casloy]

What difference does it make, if the asteroid doesn't hit us first, certainly global warming is going to do us in well before the economic crisis hits.

[Neets]

Does this mean I don't have to go to work tomorrow?

I don't, today.

[John Lenin]

At one point it was said to be 50,000 a week.

[Casloy]

Most nations first rot from the inside before some barbarian finally kicks the door down to the palace.

And that is, of course, the myth that keeps on giving.

[advance_copy]

The U.S. economy is failing

No, the U.S. economy WAS failing in the 1970s. Today:

3.8% consistent growth in GDP
5.4% unemployment
2.5% interest rates
2.2 million jobs in one year

Jimmah Carter must be rolling over in his grave. What? Jimmah's still alive? Well, whoop dee doo.

[tm22721]

The dollar lost about 27 percent last year, but since seems to have stabilized.

Dead cat bounce.

BUMP

[Liberty Wins]

The Sierra Club, League of Conservation Voters and the extremist Environmental Liberation Front share the Old Europe socialist/Nazi belief that the state must control private property. They have misled an unwary public into thinking all growth and development is evil. Zoning laws and planning commissions have done more harm than the international bankers.

[John Scopes]

Like you said, there are things about which any good conservative can disagree with Bush without resorting to the 'there was no reason to believe Iraq had WMDs' nonsense.

That lie is embedded in many porous skulls.

[tm22721]

The stock market is the best bellwether of economics.

The stock market peaked in 1966 and the deficits (war and oil) of the late Vietnam era led to the stagflation of the late 70s.

We are in a similar situation now. The stock market peaked in 2000, now we are coasting but have large twin deficits again. The malaise will be clear by 2008 but it will be too late by then to do anything about it (as in the Carter years).

Then it will take the discipline of a Volcker and the positive can-do attitude of a Reagan to pull us out of the ensuing despair.

The parallels are breathtaking. Prepare and you will ride through it. Unfortunately for those on fixed incomes it will be a rough ride.

BUMP

[beyond the sea]

I don't know if this is proper to ask but: When I posted this article, for some reason, I did not notice the first sentence and the part "preoccupied with nonexistent weapons of mass destruction in the Middle East." I find that conclusion by the author very presumptuous and wrong and so have a good number of other posters.

Is it possible to remove the first sentence? I do not want the article to offend anyone with the sentiment indicated by that first sentence.

I posted the article just for the questions raised about the dollar and the world economy.

Thanks in advance for any help possible.

[William Terrell]

The Dollar's loss of foreign purchasing power means that Americans will buy more domestic things...hardly the stuff of economic ruin.

What domestic things would that be?

[beyond the sea]

The Sierra Club, League of Conservation Voters and the extremist Environmental Liberation Front share the Old Europe socialist/Nazi belief that the state must control private property. They have misled an unwary public into thinking all growth and development is evil. Zoning laws and planning commissions have done more harm than the international bankers.

..... very true.