view.
The reason why the U.S is in this crises is because, for the past 29 years and especially in the past 8, Americans have been buying 50% of everything the rest of the World produces and paying them back in Dollars. The difference is that in 1980 the U.S was an industrial superpower that could back up their currency with physical products, as well as the sheer size and natural wealth, so the rest of the World had no problem selling all their cheap stuff because they got Boeing airplanes, advanced medical equipment, refined chemical products and other high tech products in exchange, so the U.S could afford to run a massive trade deficit because everyone knew that the stuff the U.S made was far more valuable, and that Americans could easily make the radios, T.Vs and cars if they had to, meaning that they were buying those stuff from Third World countries out of charity.
The thing is that in 1980 Reagan allowed the American advanced industry to deteriorate by loosening regulations on the exchange of know how and cutting federal grants for universities' research, and made the Dollar stronger whilst further opening the economy for imports, and the strong Dollar made American exports less competitive by making them more expensive. So the little basic industry the U.S still had - think Cotton textile factories in Mississippi - were shut down, and the advanced industry became more and more less formidable and started to depend on foreigners to keep running - the sole exception was Sillicon Valley which was too litte to turn the tide. So the U.S became a service economy with no physical production of anything to back it up. Now the rest of the World is realizing that the U.S is what Mao Tsé-Tung called a "paper tiger". Whilst in 1980 the U.S could afford to run massive trade deficits and still pay for all the stuff it bought from the rest of the World with Dollars because the rest of the World needed Americans jets, medical equipment and sophisticated electronics far more than the U.S needed their cheap Nike shoes, the U.S can no longer do this because the U.S has nothing to offer the World in exchange. Americans want to keep buying their cheap sneakers, T.Vs and iPods from China and Thailand on credit, but they are starting to realize that the real value of the Dollar is little more than the paper it's printed on. The World won't allow Americans do keep living beyond their means by simply giving Dollars in exchange for whatever they want from the rest of the World, so the FED has no alternative but to print money to solve the crises because the rest of the World won't lend to a people who don't produce anything at all. So what happens is that in 5 to 10 years the Dollar will collapse, and then th U.S will face a crises that will make the 1929 crash seem like a mild recession in comparison. First rule of economics: don't fuck with the currency. And this is what de facto is happening.
SUCKMYMUSCLE
