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If you never leave the USA's borders, and the dollar tanks like it is continuing to do, interest rates will rise, to compete with other nation's markets for investment (keeping a parity). Purchasing power will decline, and there will be a disruptive effect on businesses that are based around fixed-offshore or multinational contracts.. basically, when they signed the deals, there was a presumption of dollar stability. With the crashing, this whole presumption goes out the window, and though it makes US products cheaper abroad, it as well makes offshore manufacturing more expensive, and weakens the US buying power. It means french wine will cost more in america, and american wine will get cheaper in france.
American wine will get more expensive in america, as the wineries will have to pay more interest on borrowed capital to produce the wine, and the cost of transporting it will rise.
The worst effect is difficutlt to describe, but the whole history of america since ww2 has been that of currency stability and the world's "reserve" currency.... as this melts away, the dollar is marginalized from all markets.. (watch petrol to follow on), and this will weaken the military empire, as in the end, like with rome, empires cost a lot to maintain, and with diminishing buying power, there is a natural effect.
Were a similar currency regimen in place back round WW2 times, and the level of international interconnectivity that we have today, then to prevent an imperial japan or germany, simply tanking their currency would have been an option before military intervention, as it would have frozen their economies, much as how walmart will be not a very good place to shop if it can't afford to pay its bill to china.
This global recession would be like a new great depression, the "grand disillusionment" and an end of american imperial power. Once this collapse happens, there will be no resurrecting the past "washington consensus" and future democratic administrations will be left with a broken economy AND a fiscal meltdown... leading to the sorts of tough decisions other countries like russia, korea and argentina had to take with defaults, and humiliating arrangements with creditor nations.
Property will generally keep its value, as will some commodities... paper, stock, bonds and "virtual commodities" will be very exposed. To avoid being taken too deeply to the cleaners, invest in substance you can touch.
"The economist" ran a great article about this not long back, and if you want to keep track of this issue, i suggest getting an economist subscription at www.economist.com. They are much better qualified to discuss this issue than i, with much more backup details and information, like specifically how it will affect mortgages, social security and individual retirement accounts, 401k's and whatnot.
The dollar tanks, means the credit rating of the USA is crap and the result is, just as when you don't pay your credit card, hardship for all involved, pissed of creditors and not an easy time reestablishing said credit.
Had the american people not voted for an insane incompetent, surely this cold have been avoided... now, however, there is only bbbb.
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