Thursday, June 14, 2007
The State of the US Economy, Circa 2005
This long and detailed lecture by Martin Wolf, eminent economist and financial columnist for the London-based Financial Times will, if you care to digest it all, scare the pants off you if you have any interest in the future of the US economy. Even more frightening is the fact that this lecture was given in 2005; subsequent passage of time has exacerbated the trends discussed back then. Key message: the US dollar is due (perhaps long overdue) for a sharp decline, being propped up by the rest of the world and in particular, certain Asian countries whose economic development is driven by manufacture of cheap exports for the US. Certain trends can now be seen with more clarity, such as the movement of oil-producing countries to accept payment in Euros rather than dollars (Russia comes to mind, which should keep anyone awake at night), as well as foreign countries buying up the physical assets of the US. In sum, the Empire is no longer master of its own fate; indeed, it has ceded control to the rest of the world. Not good.