by Kingcoal » Mon 31 Jan 2005, 11:11:07
"Money" is debt created out of thin air. The US is the worlds biggest "producer" of money (read debt.) Since the dollar is the world’s most popular reserve currency, most of the rest of the world depends on the USA to produce conditions that produce economic growth. Without that growth, the dollar slides and the system is in trouble. This is the infinite growth concept discussed to death on this site.
Real growth requires the creation of increased value. Value generally comes from either increased resources or more efficient use of resources. After that it becomes very complex. Computer technology has allowed our society to use the same resources more efficiently. However, I believe we hit a detour in this process with Asia and other "low cost regions" (LCR.)
Instead of investing in efficiency improvement, business, particularly American business have simply "outsourced" production to people who work for next to nothing and don't care about environmental impact. This system worked great when oil was cheap, but is now under stress. The LCR is now faced with the same problems as their customer, even with super cheap labor. It will only get worse as oil goes up in price.
In the "outsourcing age," the USA put itself in the position of maintaining cheap, stable energy prices, as well as a constantly expanding markets for imported products. In other words, the "job" of the US was to provide cheap energy and keep consuming more and more products every year.
It appears that the US is loosing it's ability to provide cheap oil prices. With that, it's ability to control it's economy and the world economy. Unless this is reversed, the infinite growth system will collapse.
In light of the above, annexing Iraq isn't a bad idea, at least on paper. Someday soon, Saudi Arabia will see a dramatic loss of oil production. Iraq has the ability to fill a large part of that void.
If you think that dollar collapse will happen soon, I don't see other paper currencies as a haven. Gold, Grain and Guns become the currency of choice in times of emergency. Let me add one more currency: oil.