reply to post by nenothtu
Like Ford, GM, Chrysler. Instead of the top guns going bankrupt, the companies are being bought by YOU, the tax payer, so that they can continue to
run. That means there is lot of potential wealth for foreign countries, and by extension, for their citizens, that is being missed out on. They are
being starved by our incompetence. Now, you could call me unpatriotic, but I'd rather be unpatriotic than arrogant and corrupt. I feel we should be
rewarded by what we truly deserve.
A global currency would work best if its production is controlled by a large host of different countries, and not just a single corporation, such as
the U.S. Federal Reserve. Technically, that is what's happening right now. Every country holds U.S. dollars primarily as their foreign exchange
currency. Only the U.S. can print them. Everyone needs U.S. dollars to operate. So everyone buys U.S. dollars to buy their oil and resources and churn
out commercial products to be sold back in U.S. markets. This only happens because everyone believes in the U.S. economy, because it has consistently
been the best economy in the world, and because its workers always turn out the best quality work. That is not so certain at the moment. Whenever a
country buys U.S. dollars, its own currency depreciates in respect to U.S. dollars, and the U.S. appreciates in respect to that country's currency.
This whole system is only sustainable if the U.S. promises to consistently do well, to always be ahead of the game. Everyone has a vested interest in
the economic success of America.
This puts the world in a sort of moral hazard. If the U.S. fails, everyone will spend as much as they can to get it up and starting again, unless they
want all the U.S. dollars they purchased to be worth absolutely nothing. But what does this lending actually accomplish if the U.S. can just take all
the free money and pump it back into failed businesses with crappy business models and crappy products? If the U.S. decides not to do anything about
it, the world has no say in the matter. They have to keep buying dollars, and pumping in their own money to finance American blunders. So America has
a responsibility to deal with this, or else the world financial and economic system goes up in fire. No one is going to pull out until it's too late.
Their best strategy in the short run is to keep investing in U.S. treasures, even if it means buying at negative interest rates (would you ever invest
in a stock that returns negative dividends?). If China decided to sell all its U.S. dollars right now a good chunk of their entire economy would
collapse on itself instantaneously. On the other hand, say they bad a mistake and the U.S economy recovers, not only do they suffer because of this,
their competitors, Japan and Russia, for example, gain by however much China lost out on. No one country will ever take that risk, so people will keep
investing no matter what, hoping the U.S. tax payer can pull their weight and restore the global economy. Hoping...
The U.S. is privileged in that it has access to lots of natural resources and it has a very large population with a homogeneous market base that has
enough money to buy pretty much anything. Basically, America prints money for foreign countries and corporations, who use that money to buy resources
from us and make products for Americans to buy. It's just a cycle, and America is the fat cow being fed by the manure it spews out on a daily basis.
It's not a sustainable cycle. The rest of the world has to be creative and ingenious in order to meet our insatiable desires for new and better
commercial products, and all we have to do is binge off our natural resource and financial wealth by purchasing the products being hand tailored
elusively for us. If our stocks start failing, and our dollar plunges, world-wide exports decline, and the economies supplying us with their
investment dollars start to fail. If that happens, the U.S. can no longer print money worth anything and we go into a downward deflationary spiral
along with the rest of the world. All hell ensues...
If people were rewarded regardless of their nationality, and if wealth followed productivity on an equitable basis, then perhaps the world would be
better off today, but that would mean a massive redistribution of current wealth centers around the globe. You couldn't force money to be invested in
places just because you wanted to, say just because some business are "American" and somehow you're obligated to support them, no matter how bad
they're doing. That kind of attitude would just create a lot of social inequality, especially if there are better companies to be invested in. The
best thing the current administration can do is invest in science and education. If we decide to stop competing on the global marketplace we don't
have the flexibility of colonizing new lands for resources and wealth. There's none left! Best to follow the rules and play the game.