Searle: Everybody has their own selfish reasons to either hope for a collapse of the US dollar or to keep it at its present level. A sudden collapse would probably result in a world wide currency crisis, and the outcome may not be to anyone's liking. World wide depression is good for no one.
Many gold bugs see the US dollar as the anthesis of gold. Strong dollar, weak gold & vice versa. I for one do not share that premise. That said, there must be a mechanism to honestly price the US dollar against other world currencies, as it is now against commodities.
The US has been the engine of economic growth for the whole world. But I don't believe this is written in stone that it cannot change. Perhaps it is Asia's turn, or perhaps a united Europe can shoulder some of the load. I know your theory that debt doesn't matter, and so therefore the US will forever be able to consume and absorb all the cheap excess production from the whole world. If that is so, then yes, this system will continue forever, the US will get fatter, the rest of the world will happily and profitably keep feeding the voracious American appetite.
Kind of like force feeding a goose. I have never seen it done, but it apparently works, and the goose grows to an enormous size quickly. But, I think I know what happens if you keep feeding it. Too much of a good thing will not result in a golden egg.
I have often wondered about how much value the US dollar and the US citizens have gained from their status of being the world's reserve currency. If insignificant I have thusly wondered, I do believe others in powerful position must also be contemplating this.
Besides, it is unfair and unnatural that all other currencies can rise or fall, depending upon their national fortune or misfortune while the US dollar is treated like gold.
I read recently that if the United States were subject to the same scrutiny and methods applied to say Argentina recently, the IMF would long ago have intervened. But of course, the IMF is the USA.
I enjoy discussing this fun topic, to which there will not be a quick resolution. So, we have time in the future to re-enforce our arguments and maybe to even say "I told you so". |
