tag:blogger.com,1999:blog-23884640.post5280513719337463145..comments2024-03-22T03:13:15.710-07:00Comments on Engineering Ethics Blog: An Economic Prophecy for Engineers—And Everyone ElseKaydeehttp://www.blogger.com/profile/15055360323969104129noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-23884640.post-50449544482613966272010-03-20T15:44:16.624-07:002010-03-20T15:44:16.624-07:00Living in Canada, I have always recognized our rel...Living in Canada, I have always recognized our reliance on the US economy, and while, since the 1980's, we've been doing as much as possible to separate ourselves from it, we cannot separate by any great amount. We're just too small and too close, and you're just too big.<br /><br />Watching that attempted separation while also watching US debt (public and private) soar to a ridiculous level _and_ being involved in a couple of international organisations that take it for granted that the US engages in debts it has no intention of ever developing the ability to pay off, I came to the conclusion at least 20 years ago that there is a US dollar bubble.<br /><br />That bubble has been sustained by small countries who don't print their own currency using the US dollar as legal tender (so that their economies support the dollar), by a general belief (lived as a religion inside the US) that the dollar cannot fail, and, most recently, by China deliberately failing to call in your debt.<br /><br />Those small countries have been switching to the Euro as being more convenient - only to discover that, contrary to prior belief, it's actually more stable than the dollar. Even here in Canada, where the myth of dollar infallibility has been almost as strong as within the US, people have begun discovering that it isn't enough to compare our dollar to yours to know how we're doing internationally. <br /><br />In other words, the US dollar is no longer the standard against which all others are measured. Rather, it's only one among many - and it can fail.<br /><br />The Canadian dollar has been doing dramatically well internationally ever since the causes of the market crash were understood. Yes, we have the advantage of having the only banking system in the world that didn't buy heavily into the US sub-prime market - but I think people are looking at that and wondering why we didn't. <br /><br />We're your closest neighbours, your best friends (whether you always think so or not), and you are by far our largest trading partner, so why didn't we when everyone else did? Because our banks had better things to do than invest even more heavily in the US. In other words, that persistent unofficial policy of separating ourselves from you paid off. Which suggests to everyone else that maybe they should separate themselves from you, too.<br /><br />Personally, I consider that dollar bubble popped. China can't keep it up all by itself.<br /><br />You think the US will come out of this wiser. I don't. The first four bubbles were created by deregulation that the Republicans are still proud of. They popped first because they were least sustainable; but by their very existence they caused the dollar myth to fail, and the same blind self-serving internal politics that created them is going to pop the next one, too.<br /><br />Obama's detractors seem determined to find ways to blame him for everything from the Haiti earthquake to the messes he inherited, regardless of how that blame falls out on the US in general. They are (some of them) so fanatical that they are willing to suffer for the sake of pinning "something" on him, no matter how specious. <br /><br />Just wait until they start blaming him for the debt - that pin is going to pop that bubble, simply by finally drawing _everyone's_ attention to it. Slight of hand and misdirection have been the only things keeping that bubble up in the air for decades; it can't handle a spotlight.alisoncircushttps://www.blogger.com/profile/11166983970609518550noreply@blogger.com