Thread:

China Prez...

Originally Posted by zacho!

I've heard and read all the reasons it could be the "endofunitedstates15.com", gotta ask why not so bad?

Look at history for a similar situation. Years ago, the world's reserve currency was the British Pound Sterling. Great Britain was the economic power in the world that drove much of the world's economy, not much unlike the United States and the dollar today. In the late 1800s, there was a depression of great proportions that is referred to as the Long Depression. The duration of this economic downturn was close to 25 years. This followed a second industrial revolution in England which had led to more productive means of production which required less labor and resulted with many years of a down economy in England. After the LD, GB, while still an economic power, was not the great economic power it had been before. New nations were rising up to drive the world economy, with the US being one of them. The BPS ceased as being seen as the stable reserve currency that it once was.

The moral of the story is that Great Britain did not perish from the Earth; it is still around, and has a pretty big economy. If the dollar were to cease being the world's reserve currency, it wouldn't just magically happen instantly, it would happen over a drawn out period of time. A couple of things the US has going for it is it's the most stable economy, and the US Government has never defaulted on a debt. But let's say for the sake of answering your question what would happen if nations stopped seeing the Dollar as the pillar of stability. We would find it harder both as a nation, and as consumers to aquire credit. This would result in spending cuts. The amount of money you have to waste on nonessentials would decrease. The amount of money the US could spend to protect its overseas intersts would decrease, probably leaving us with a much smaller military without the ability to exert our influence throughout the globe. The dollar would still be a reserve currency, but so would the Euro, Pound, Yuan, Rupee, and the Real. We would cease to be the worlds sole superpower, and be one of many regional powers which would include Russia, China, India, Brazil, England, and Germany. Our influence would mainly be in Central and North America. The US would still be around, just not as powerful, and the standard of living might drop a bit. To be honest, I think we are already on our way to this happening. I think the current downturn was the end of the Dollar as the world's premier currency, much as the Long Depression marked the end of the BPS as the world's dominant currency. And don't worry, China won't crash our curency, because they are as reliant on the US consumer as we are on them. Think of our realationship with China as the two biggest kids on the block where we would both lose way to much if we actualy came to blows with each other. We will each try and jockey to get the upper hand on the other, but China doesn't want to see the US fail any more than we want to see China fail.