Thursday, March 09, 2006

The End of an Age

Americans seem to treat our status as the world's most powerful country as given. Few recall that our ascendance to dominant superpower status occurred only after World War II. We squandered our good fortunes on a costly war in Vietnam, which resulted in President Nixon ceasing to back the US dollar with gold. That marked the first time in two millenia that the world did not have its most powerful currency backed by a scarce commodity. Instead, we moved it to being backed by simple goodwill.

Now, while our manufacturing has moved to China and the promised services boom has gone to India, we are squandering our remaining dollars on a costly war in Iraq. It should come as no surprise that the Euro countries now claim a larger economy and a more stable currency. Our days on top would seem to be numbered and we had better adjust our attitudes.

How long will it be before China catches up to the E.U. in total economic might? Less than a generation, that much is pretty certain. Then we will be at least number three.

Foriegn investments in US dollar bonds float our economy. They pay for our ballooning trade deficit and our overseas wars. What do you think will happen when those foriegn investors start to buy Euros instead? It is already starting to happen. We have less cash, less growth and less economic security than we think we have.

We used to claim the world's most populous city. New York is now number thirteen, behind Mumbai, Shaghai, Sao Paulo, Seoul, Moscow, Delhi, Karachi, Istanbul, Beijing, Mexico City, Jakarta and Tokyo. Don't know where all of those are? You'd better learn, and knowing at least one of their languages wouldn't hurt, either.

I don't know about you, but I am rearing my children to be prepared for a world that is not centered on America. Are you?

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