CloroxCowboy

America To The Rescue

I believe if you look at the entire debt to GDP graph you'll see that the huge spike in the ratio was caused by the waging of WWII, and quickly relieved in the years following its conclusion. The pattern is similar to the one seen during WWI and the Civil War before that.

Food certainly is one thing we make a lot of, but my point was that oil markets denominated in dollars may provide unstable support for our currency. If the world were to start trading oil in euros and I would expect to see an effect.

America To The Rescue

The United States IS losing relevance. We've had our hegemony since the favorable (economic and industrial) outcome of WWII, which created a HUGE trade surplus, pegged currencies to the dollar, and quite logically pushed our economy through the roof.

But that was over 60 years ago... What goods do we produce now? Where is the mighty industrial capacity that launched us on to the world stage in the first place? Americans today hold service jobs. We sell things to each other that are made elsewhere. We live on credit...not just credit from other Americans, but mostly from the (quickly) developing world. Oil markets around the world deal exclusively in dollars, think that could have anything to do with the survival of our currency in the face of so much debt?

And with all that we're supposed to think that global stocks showing a short term rebound means the storm has passed? Something inside tells me global stocks and the US in general are standing on something far removed from "solid footing". I believe I'll pass on buying today.