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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: sea_biscuit who wrote (46584)	2/16/2006 12:41:21 PM
From: mishedlo	Read Replies (3) \| Respond to of 116555

Maybe the hegemony was "legitimate" in that it was built up on the basis of a vibrant JS economy. But all that is in the rear view mirror now. What we are looking at now is an attempt to sustain that hegemony on the basis of an economy that is rotten. China, India and others are changing this as we speak. China and India yes. Slow and over time.There will be a gradual shift away from the desirability to hold US$. Should Japan decide to do that suddenly it would be lights out for the US. But Japan can not even end ZIRP. Right now the US is still the world leader in trade and as long as that lasts so will the hegemony. I suspect we see a resolution of this after a long string of US recessions starting any time now. Resolution will be 10 years from now or more as it becomes painfully obvious that BWII is not workable. But note how none of this has to do with an Iranian oil bourse. Iran is trying to make a political statement but that political statement really has little if any economic affect. From a trade perspective it is just too little to matter even IF (which I doubt) it affects real shifts by anyone out of US$ into euros. Mish