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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (51129)	6/20/2004 6:36:35 AM
From: elmatador	Read Replies (1) \| Respond to of 74559

The US has so much to go after to keep its economic prominence that the return to its natural size may take the next 50 years or maybe even more. The first blow was 32 years ago when the gentlemen's club aka the Bretton Woods agreement created after WWII died in August 1972 when Nixon opted out the gold standard. But the USD is still the reserve currency. Let me use the military might to illustrate my case. Then we could well extrapolate to the economy. The US still spends $400bn+ in defense 14 years after the end of the Cold War. (the whole Cold War lasted 45 years). Witness how slowly has been the dismantling of the Cold War apparatus. Closing Clark and Subic Bay and pulling troops out of Europe. Only now you see the pull out off S. Korea and moving the divisions still in Germany to other cheaper countries in the Eastern part of Europe. At this pace it will take more than 36 years to dismantle the defense apparatus. There you'll have: Half a century to close down the case. How long it will take for the USD to lose its prominence as the world's reserve currency? Five years of the Euro and it hasn't even scratched the surface of the US, even if the deficit breaks record after record. The European economy as countervailing power? If I'd be an American I wouldn't lose sleep. It is too busy trying to keep afloat to be any threat. It went from 9 to 15, from 15 to 25 members and it will only make a dent if encompasses Russia. I'm not implying that the post-baby boom generation individual will have a easier life than the one that precede them, it will tighter. But the natural size of the US will take time to shrink. It is going to happen, that's for sure but we all here in BBR won't live long enough to see it. But you're going to say China: Well, it will take 50 years.