James > do you think it likely that Kerry or Bush will institute trade tariffs in the near future?
Bush, no, but Kerry, may try. Tariffs are a double-edged sword -- if you put tariffs on me, I'll put tariffs on you. Furthermore they are very destructive to the US policy of globalism which is, in fact, a form of economic colonialism.
> Asia's balancing act to manipulate the $USD to make it profitable for them to unload goods here surely cannot go on forever.
But don't forget, this is also a two-way street -- the money China & Co get from selling their goods to the US is used to buy US debt and thereby balance the US books. If they didn't/couldn't sell their goods to the US, the US would be insolvent. Of course, one could argue that the US is bankrupting itself as result of the purchases of all these goods, but no-one is forcing the Americans to buy them. People do have a choice, they could save if they wished to, but they prefer to spend. Furthermore, if the goods were made in the US, with US labor, the goods would be much more expensive than they are. In fact, the cheap Asian consumer goods help to keep inflation in the US down.
> The US consumer can only take so much inflation before we see bankruptcies and loss of living standards as never before experienced by the middle class.
I am aware of that, and it will happen when interest rates, especially mortgage rates, start rising as they have to do. But no-one wants that evil day to come. Of course, the real double whammy or even tripple-whammy will be when the value of the USD falls and interest rates rise. Then one can see exacerbation of inflation together with increasing loss of purchasing power of the currency and higher monthly interest payments. The outlook for the "ordinary" American is very problematic and, in the face of all this, wages/salaries could also fall as businesses struggle to survive.
> I would appreciate it if you could comment on what you see over the next five years for the US.
I think a lot has to do with the administration in power. In fact, I simply cannot understand why "ordinary" Americans even consider re-electing W when it is clear that, under a Republican administration, their situation will be far worse than under a Democrat one. But it seems all the terrorist propaganda and bin Laden tapes etc have so thoroughly terrified the American people that they don't know what is going on and therefore what they should do.
In my opinion, therefore, life for "ordinary" Americans, particularly if the present administration is re-elected, will be very bad. I see economic hardship, governmental and business oppression with restriction of Constitutional rights and other freedoms, "witch-hunts", arbitrary arrests for anyone who dissents, persistence and, indeed, escalation of wars, and all this leading to heightened anxiety, fear and anger of the American people both amongst themselves and for others. Indeed, this may be the last time, and for a long time, that proper elections are held, bad as they are. The way things are going makes me think that the road leads to increased tyranny or revolution or both. |
