Way back at the beginning of this stream, it was obvious that financial relativity theory interacting with the US$'s mountains of debts, derivatives, deficits and dissolution could lead to dissipation, diminution, deflation, depression, desolation and maybe something beginning with other letters too.
Now the process is upon us, up close and personal so we will see the result.
Big Ben's talk is of withdrawing the deluge of money at some stage, at just the right time, when the downward risk has ameliorated a bit more.
There is a LOT of money to rewind so that process will be interesting. Meanwhile, coast to coast, wastrel governments have run out of money.
It does seem that USA people and their governments have been living beyond their means and to quite a large extent and have built up expectations of entitlements which can't realistically be met.
There has already been going on 3 years of market clearing, which is quite a bit of time. So the risk of total collapse is gradually waning. But there is a LOT of financial catastrophe still to be tidied up, so the situation is far from over despite reassuring comment from "authorities".
The US$ has already taken quite a pounding. Having been a commodity salesmen, I know that it doesn't take such large shifts in pricing to make a big difference to sales, so exports should be booming. Imports will dwindle as the broke cease buying and the not broke become more circumspect about their profligacy.
Maybe things will smooth out over a few years with people gradually accepting their changed [for the worse] circumstances but with things more or less going on normally, for the most part.
Mqurice |
