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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: philv who wrote (22461)	2/28/2005 1:25:35 PM
From: sea_urchin	Read Replies (1) \| Respond to of 81109

Phil > If nothing is allowed to change, I guess we just go on in the same direction, and fundamentally, this should be good for gold, as debt and deficits just keep on growing Good for gold for those in the US but not necessarily so for those in countries (Canada, Oz, SA, Euroland, UK etc) where the currency has appreciated against the USD. We have had this discussion many times. > debt and deficits just keep on growing. And of course the higher these debts go, and assets built on debt, the greater the danger when they finally fall. This is a whole new ball-game. The US says debts don't matter, the rest of the world is shivering and shaking. I suppose a lot has to do with the way creditors feel, especially the major creditors -- China, Japan. The way I see it is, if there's no point in devaluing the dollar because it won't benefit anyone, then the US is technically bankrupt already and people, both Americans and non-Americans, must make their own arrangements to suit themselves. Thus, arguments which seek to rebalance the world financial system are irrelevant because it can never be. The US can never repay its debt nor can it devalue the dollar so that it is, once again, a solvent, exporting nation, because it can NEVER compete with China, especially while the Yuan is pegged to the USD. So, there HAS to be another outcome. As I see it, the most likely scenario is that the game simply continues -- the debt increases, the USD falls a bit or it doesn't, the US continues to live beyond its means borrowing as much as it can and while it suits China, Japan & Co to lend they will, and when it doesn't, they won't. Then the US can cry "default", like Argentina, and the game starts again. But what is happening, inexorably and inevitably, is that the US is actually becoming impoverished and losing its industries and its power -- forget all the military BS. Meanwhile, as the US struggles with the smoke, mirrors and its financial balancing act to stay alive, the nations in the East, Europe and Russia are becoming stronger and richer until, eventually, to coin a medical expression -- like a tumour which has outgrown its blood-supply -- the US will simply shrink, and possibly even die, from necrosis brought about from its own excessive growth in the circumstance of nutrition which is unable to sustain that growth. The host is simply unable to satisfy the excessive demands of the parasitic tumour. Of course, it is possible that the tumour kills the host, but I don't envisage that possibility unless the US chooses to nuke everyone as a final gesture.