So, "we will always win, because, we are Americans!"
Pride goeth before the fall.
Previously, our allies always stepped in to protect the dollar at key exchange rates, afraid of the global system losing its balance. The yen at 110, the Euro at 140 etc. That is, they would lower interest rates to protect the dollar status quo.
This is not happening this time. The world sees the dollar as doomed this time, and they don't want to ride it down. The Saudis are not dropping interest rates as they have previously, which means they are dumping their dollar peg. The Chinese are staying away from the T window. This is not just another swing in the old cycle. This is the end of the dollar's world reserve status. We are not going to just "run the board" again because we are America, and we always win.
I enjoy your posts, you really understand things imo.
A point I’d like to add to the discussion is I notice many learned Americans, major journalists, economists, experienced bloggers and forum users.. are blissfully ignorant of Europe’s rising economic strength. I notice some making increasingly elaborate conspiracy theories for why the Euro keeps rising, and why its about to fall back down dramatically.
It seems many are living in the 1990’s.. when economic growth was being driven by IT. And America’s best in the world venture capital and small business system was growing by leaps and bounds, while Europe was stalled out.
What they missed was ‘the transition’.. into this decade when IT started really increasing the productivity of big operations. The biggest sign I know of, the French firm Alcatel bought Lucent one of the stars of the tech boom. Europe was never really great at making small business, but they’ve always been good at running large national champion companies. No one I know of thinks that Cadillac or Lincoln are remotely close to BMW or Mercedes in technology, sales or profit. Europe’s big corporations are growing powerfully and their tech portfolio is growing.
Then there is Euroland’s unseen economic power to consumers. Like European engineering firms, glass makers, advanced metal producers.
I liked your statement ‘we will always win, because, we are Americans!” Its true its like we will always win because we spend slightly less on government then them. As if things like how many of our young are becoming engineers doesn’t make any difference to national wealth. Or how well ran our big companies are being ran, as opposed to ceo’s looting them for all their worth.