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hyperbola9 months ago

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Not only the Chinese and Russians.

After almost a half century of continuous massive debt by the US, the world is tired of financing our profligacy, especially our imperialism. Remember that we have been the world's biggest debtors ever since Reagan engineered the Savings and Loan scam and that Bush sonny accomplished that the US now pays more out to foreigners than we earn from our overseas investments.

Seen from a world perspective, Obama's prodigious spending to "correct" massive corruption in our financial system (which the world has been complaining about for at least 8 years now) looks hypocritical on two fronts: (1) because Obama's "plan" is based on borrowing money from foreigners (we don't have the money), he wants the world to pay for our corruption, and, (2) the result is more or less an attempt to finance our failings at the world's expense through devaluation of the dollar.

Less than 100 years ago, the pound sterling was the world's reserve currency. It lost that role within a period of 10-15 years. It would not surprise me to see the same happen with the US dollar. Already new bond issues in Euros are comparable (or greater) than those in dollars.

The replacement is likely to be of the same kind that Europe used prior to the Euro: a weighted basket of different currencies.

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  jovial9 months ago
  
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  I know the world is angry with America for letting this happen, but I really don't think that they can do anything about it in the short term. Maybe I'm wrong. The foreigners are letting Obama borrow the money, because it's in their interest to see the dollar succeed. The dollar has been steadily losing value for sometime now. The Euro was trading at 92 cents to a Euro in 2002. Now it's a $1.35. That's a fifty percent increase in value. It was even higher than that at times. If the dollar loses too much value we will see a great deal of foreigners coming in and buying up our companies, real estate. We are already seeing Chinese investors buying up real estate in Southern California.
  
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    dissent9 months ago
    
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    buying up our companies and real estate is one smart way for them to get rid of their dollar holdings. stockpiling commodities like oil and steel bought in dollars while they're cheap right now is another. selling the dollar is about the must stupid way to get rid of it. hanging onto dollars is not in their interests anymore. getting rid of it is. it's the albatross around their necks. this is why they're looking for an alternative.
    
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