I was taking my normal, early morning walk with my partner this morning - the Kangaroos were jumping across our path, and the very first hints of sunrise were escaping over the mountains.

As usual, we were talking about a myriad of topics, until she looks over, and asks, "What would happen if America fell?"

A bit taken aback, I asked her what she meant.

She replied, "If the US fell, what, in your opinion, would happen to the rest of us?"

We talked through it, and I realised that I didn't really have even a basic answer.

I explained that the US debt isn't that bad on a GDP level (Japan's overall debt is twice as large as the US in respect to GDP).

However, the problem with the US is that their debt runs the risk of crashing the entire system - as well as being the largest economy in the world, it is also the benchmark of the monetary system. The US dollar is the worlds largest reserve currency.

IF the US economy continues to falter, the perception that the US is the "safe haven" will dramatically switch. If this happens (and in truth it is currently happenning), the US Treasury securities will seem less "appealing" to the rest of the world.

What does this mean?

In simple terms, interest rates will rise, slowing consumption and investment, and ultimately making it harder for the US government to handle it's budget deficits.

The US dollar is slowly crumbling, which is reducing the value of currency reserves (hell, $1 Australian dollar now buys almost $1.10 US).

I would dare say that the US dollar is on the tipping edge of losing it's status as the worlds premier currency - if this happens, living standards will slide for Americans, and the entire world will see a significant slow down in growth.

Who would take America's place? How long until the Yen is seen as the global leading currency? What impact would this have?

These are the questions no one has the answer to ... what are your thoughts?

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YOU MEAN WHEN AMERICA FALLS... its coming.

Just think of USA as the new-age Rome, now go from there.

If America falls can we still travel to a foreign country normally? I mean I'm planning to go to Australia in the future

Well it wouldnt be the first to fall, we would just do what everyone else has done and will do for the rest of History

Americans are used to being "#1"..I don't think the U.S. government would allow America to fall..I know its suppose to happen but I think another war will start before then..or something along those lines.

I would dare say that the US dollar is on the tipping edge of losing it's status as the worlds premier currency - if this happens, living standards will slide for Americans, and the entire world will see a significant slow down in growth. Who would take America's place? How long until the Yen is seen as the global leading currency? What impact would this have?

I think we are indeed at the tipping point. Or, rather, have been for about a decade. I suspect the 'housing boom' in the states may have merely been a bandaid making the inevitable even worse. One could argue the 'tech bubble' of the Clinton years was similar. The US economy has likely been teetering for decades.

I doubt we'll see the Yen as the leading currency. It is too tied to the dollar, and the dollar's collapse would bring the yen down, too.

I suspect that many people are expecting a big 'crash', when what we are really seeing is a slow and steady move to a more stable 'world currency'. The US may be shrinking in terms of financial importance, but the multi-national corporation she birthed and who currently pull her strings are doing fine. They are merely becoming globally-based. I doubt those corporations really want a collapse. That would negatively effect their bottom line. It's just a shuffling of the deckchairs, so to speak.

No big crash, just moving things around a bit.

Originally posted by ExCommando

I explained that the US debt isn't that bad on a GDP level

You explained wrong. You can't get a meaningful info from comparing "failure" and "utter failure". At least Japan has a homogeneous, cohesive culture, despite the corruption.

US debt is over 45,000 USD per person in the US. And rising daily. The system is being set up to crash -- and it will ..... soon. That's intentional.

The odd thing is that these globalists actually think they can get away with overt, in-your-face criminal activity. Maybe they are counting on cognitive dissonance and/or other programming techniques to keep us in line. It's troubling to think of an entire race of people that apparently don't yet have the ability to resist being dumbed down this badly......

Hyperinflation and plunging real asset values will fix the problem.

Originally posted by incrediblelousminds

I would dare say that the US dollar is on the tipping edge of losing it's status as the worlds premier currency - if this happens, living standards will slide for Americans, and the entire world will see a significant slow down in growth. Who would take America's place? How long until the Yen is seen as the global leading currency? What impact would this have?

I think we are indeed at the tipping point. Or, rather, have been for about a decade. I suspect the 'housing boom' in the states may have merely been a bandaid making the inevitable even worse. One could argue the 'tech bubble' of the Clinton years was similar. The US economy has likely been teetering for decades.

I doubt we'll see the Yen as the leading currency. It is too tied to the dollar, and the dollar's collapse would bring the yen down, too.

I suspect that many people are expecting a big 'crash', when what we are really seeing is a slow and steady move to a more stable 'world currency'. The US may be shrinking in terms of financial importance, but the multi-national corporation she birthed and who currently pull her strings are doing fine. They are merely becoming globally-based. I doubt those corporations really want a collapse. That would negatively effect their bottom line. It's just a shuffling of the deckchairs, so to speak.

No big crash, just moving things around a bit.

I sort of agree, but I also believe the things which are being "moved about" are becoming worthless (or worse than worthless).

You have a country with a massive amount of bad debt, high unemployment, and from what I'm seeing and reading, a very disenchanted people.

Aside from that, an extremely overstretched military ...

There are so many scenarios one could ponder, but the one I feel is inevitable is war. Whether started by the U.S to bolster there influence and economy, or a re shifting of power. The U.S isn't going down without a fight. Just my opinion mind you.

It will not fall.
There may be unrest. There may be transition. And the rest of the world may get very, very pissed by the time we have put our financial house in order, but the U.S. and its actual economic position will not fall.

1. China, much to their dismay, can't afford for it to fall. Not only do they have a huge stockpile of our dollars but they rely too heavily on our purchasing power to propel their own economy. Yes, they can wean themselves. They actually want to cool down their GDP. And other markets are rising that will eventually be able to combine to replace the purchasing power of the U.S. but that will take time and the U.S. will use that time to stage the next paradigm shift.

2. We feed the world. It's so heartless and cruel to break it into those terms but, there it is. Cut our dollar. Jack up oil. Do whatever you must. And then watch our food export prices simply rise to the new occasion.

3. Despite the enacted policies of the last several decades the individualism of U.S. culture is far better suited to isolationism than it is to the globalist "its a small world after all". We can feed ourselves. We can build shelter. Most Americans, yes even the elitist leftists who would rather not admit it, don't REALLY care what the rest of the world thinks. We could default tomorrow and many would consider it finally being paid for everything that has been placed on our shoulders over the past decades in terms of policing the world.

4. The Yen can't replace the dollar. You already noted that in terms of GDP the Yen is in worse shape than the dollar. And it will continue to deteriorate as the costs rise on the recent disasters. Also, they hold a ton of our debt. A devalued dollar hurts their economic standing as well.


On a more speculatory note, havent' you noticed how close to parity all of the wester currencies are moving? Sure you are up .10 right now. Canada and the U.S. have been just about even for awhile. The pound and the Euro are still up there, but the Euro will be facing debt crisis corrections for some time to come. Amero? Banquero? Your guess is as good as mine and I am not saying that the currency of note will be the "green back" but the U.S. fiat is backed by military might and self sufficiency. Turmoil is likely. Collapse would shock me to the core and we would just exist in a closed system where it didn't matter what anyone else thought. Would give us more jobs that way too...

Don't get me wrong, I am not saying that Americans don't care about people around the world, as a people we are very caring and sharing, especially in good times. It's just that we tend to be a home first kind of place. If things get really hairy we will just close the door, pull the shutters, and wait for the storm to pass. And it will.

I think unless you're in a third world country that mooches off the US, I think you'll be fine.

But if we do fall, we are taking a lot of countries with us.