On Sat, 28 Feb 2004 16:04:43 -0700, Willi wrote:



Greg Pavlov wrote:

On 26 Feb 2004 15:29:27 -0800, (Jonathan Cook)
wrote:


We live at a standard that is unsustainable, as it is achieved through
unsustainable "optimizations". It _will_ fail eventually, the only
question is when. And I for one am starting to think sooner rather
than later...


It will fail for the majority of our citizens, but
several million will do quite well. With sufficient
protection, they will enjoy their status. In other
words, look at any country with a small or non-
existent middle class and you will see a mirror of
our future. And it will come about through the
collapse of the value of the dollar: that will be
the only way, at the rate we are going, that we
will ever be able to repay our major debt holders
overseas. There is some belief that Communist
China, which is currently propping up this
administration by buying up billions of dollars in
US currency, is beginning to catch on to this
possibility.


Both China and Japan are very heavily invested in the US dollar.

The Chinese are beginning to put moneys into currencies other than the
US dollar and there are rumblings about China freeing their yuan from
its ties to the US dollar. It is the consensus opinion that the yuan is
significantly under valued because of these ties.

Willi



Britain is still the biggest contributor of FDI to the US by a long
shot -- maybe that explains Blair's rational . . . . .

2001 numbers, Britain 217.7 billion USD. Japan is next at 160 billion.
This trend has been ongoing for years. Britain's contribution is
larger than all of Asia and the Pacific in 2001.

There is a second problem that isn't covered in these numbers and
that's the accumulation of US dollars in countries enjoying a current
account surplus with the US. Most of those countries are friendly
trading partners of the US and are not likely to cause any problems.
The last time this was a major problem, the oil crisis of 1974
conveniently redressed the balance.

Peter

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