Phil > do you think the US can continue along the present economic and monetary path forever?
By that I presume you mean living beyond its means and in debt, making wars, especially in the Mid East, with the rich getting richer and poor and middle class getting poorer -- the answer has to be no.
> If it can't, what will the result be when a change occurs?
It can't/won't be nice. I don't see a happy ending, but I don't necessarily think the US, as we know it, has to end soon. But one never knows. The Iraqi war has shown me (if no-one else) that the US is far less powerful and far less resolute than I would have believed.
On the economic side, as I see it, the US can't have it all ways to suit itself -- a strong(ish) dollar and burgeoning unpayable debt, both public and private -- and no sign, even on the horizon, that either the populace or the fiscus can balance its books. Furthermore, and despite AG's micro-manipulations and bullish prognostications, there appear to be no signs that interest rates have any intention of rising, even in the face of strong inflationary pressure. So, I believe something has to give and that will surely be the USD. Maybe the rise in Chinese interest rates, small as it is, is the signal for the devaluation of the USD to begin and then for US interest rates to rise. After that, anything is possible.
> I know this is way out speculation and one has to stretch one's mind and imagination which I know doesn't sit well with your scientific predilection.
Thanks, unfortunately any speculation/forecast is still based on my assessment of existing trends and is therefore, to an extent, still "scientific". |
