Yes, the abuse of the dollar as the global reserve currency
has been going on for decades. In particular, this led to
US becoming the global financial powerhouse, the position
we unlikely surrender peacefully.
US credit rating agencies participated in speculator schemes
to crush foreign currencies, in order for US companies to
utilize cheap foreign labor. That was the key cause of the
Asian currency crisis; it is the main cause of what's
happening in Greece now, although now the attention of US-led
policies shifted to distracting the global financial community
from the sick fundamentals of the dollar.
This has been going on for a while. Eventually all of these
problems will come home.
Now we don't have much of the real economy to count on.
So, for sure, the crisis will be very bad, and will involve
a depression, 25-50% decline of the real GDP, because the
US economy is badly out of balance and needs adjustment.
However, depression may happen along with a major depreciation
of the purchasing power of the dollar. So far Ben responded
to the financial crisis by effectively blowing the original
money supply 3-fold, which is a lot more than gold being
revalued from $20 per Oz to $35 per Oz during GD. The problem
is, during GD we were the industrial powerhouse. Now we
are a dying superpower with gutted manufacturing base.
IMHO. |
