personal) has run up. However, as long as OIL is priced in dollars and
Japan and China keep on buying dollars, the USD is going to remain the
worlds anchor currency. In 50 years time when Oil runs out, things will
be different. Personally I'm looking 5 years ahead and my prediction
is a period of Democrat benign neglect of the dollar following on from
GWH's huge tax handout experiment = another period of rampant world-wide
inflation. I hope I am wrong but its all looking suspiciously like the
period from the late 60's through into the 70's again. Even the 'low
interest golden scenarios' are coming out again.
Before WW2 the pound was the anchor currency, then it was a greed by the
Brits, as the Yanks had us by the balls, that the dollar would be No.1. The
Arabs still used the pound in oil transactions many, many years after as
they trusted the pound.
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Ther are signs that there is a slow and careful shift out of dollars
into the euro and sterling. from 1.5 dollars to the quid, its now 1.8
dollars. Even more marked against the euro.
There is a better than strong possibility that it will not. It will
reamin one of teh main ones, with the yen, and teh euro.
Make that 15 years, not till it runs out, but till the political and
social issues make it relatively much more expensive.
When I used to but petrol in the 70's I copuld fill a tank for a fiver.
And I used to draw maybe 30 quid a week to live on. Today, I draw maybe
100 and 50 quid fuills the tank. Relatively fuel is now - with housing -
very high budget items in anyone's book.
That is a sane policy up to a point: taxing consumption of scarce
resource is perhaps a little better than keeping it cheap until it runs
I would not bank on it.
The US economy has deep and serious structural problems. Or to put it
another way, it doesn't live in the real world. That is not an
infinitely sustainable fantasy. GWB has tried to keep it there, but at
huge costs in terms of deficits. And, like anyine who borrows enough
money, the easiest way to avoid paying it back is to let the debt value
slide via exchange rate manipulation. George borrows dollars from saudi,
and pays back dollras, but they are worth much less than the dollars he
You will see inflation in the US up, but it may help the native industry
to be competitive, but the dollar is set for a long long slide now.
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