11.24.2007

How Bush Screwed Our Thanksgiving

From Blake Fleetwood over at The Huffington Post:

America's powerhouse economy depends on global confidence in the stability of the dollar which has traditionally attracted the world's surplus savings. But with the rapid fall of the dollar, other nations are increasingly indicating that they will invest in other currencies. Confidence in the US greenback is waning among foreign businessmen, a finding that in itself may be a self-fulfilling prophecy.

The U.S. exports 70 cents worth of goods for every dollar it imports. The U.S. has borrowed more than $3 trillion in the last six years. Money moves across markets with the push of a button.

If foreigners lose confidence in the U.S. economy, they will want their money back, the dollar will fall, and foreign investments will tumble, triggering an even weaker dollar. To an amazing extent, the U.S. economy has relied "on the kindness of strangers" to fuel its domestic and international investments and the recent real estate boom.

The consequences for our American Empire may be disastrous and swift, if the "kindness" and confidence of global investors is shaken. Will America succumb to the same imperial overstretch as the Roman, Dutch, Spanish, Soviet, and British? Hubris does not allow us to see much in the future. Every empire thinks that it is different, but....?

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