IS AMERICA GOING TO THE DUMPS? PART THREE

The continuation of the discussion of how America is faring in this new global economy from my buddy: Read Part One or Part Two.

If only things are so straight forward. The world is so globalized that just describing the US CHINA relationship is not really representative of the big picture but only one strand. In fact, US has a bigger deficit with the middle east due to oil imports.

And China, in fact is becoming much less independent of the US even though America is still the largest trading partner. China is exporting heavily to Europe…and not to mention every part of the world because the existence of -”product”- originate solely from China because some products are produced no where else in the world because the laws of economy don’t allow it to exist in any place except China. No other country produces better and cheaper -basic- products or even high tech products… (in the grand scheme). It is clear though, China has its fangs, tentacles or whatever you want, in the main blood vessel of the US, and is sucking some tasty cold hard cash.

Yes, America may bounce back because America is a strong country and even though the political system may be decrepit in many aspects, it’s still the best and provides unquestionably the best standards of life (barring little insignificant countries like Norway etc) on a broad scale.

But, maybe the finer point of argument and perhaps the central issue is, can America maintain it’s overarching dominance?

The near future is certain that it can maintain a waning dominance, militarily, and economically despite it’s debt. ( we are seeing weakness thru the handling of the middle east as well as north korea, where china appeared as a big involvement and mediator/instigator) Nevertheless, I’ve realized that the expandability of debt is very flexible simply because we are not tied to gold anymore and everything is numerical. But what is at stake may be 1) credit loss…the credit (believability and worth) of the US dollar and the US economy 2) opportunity and power, the piece of the pie will get smaller for the US as wealth is distributed throughout the world causing multipolar superpowers rather than one single American power. American’s will have to get used to it and use more of it’s diplomatic/democratic face. They will have to accept other nations doing things better and bigger..Korea, the number 1 LCD producer, Japan most successful car manufacturer, etc etc. We’ll see…say we have another good 40 years to live…we’ll definitely see how this all pans out.

When i try to think deeper, it just doesn’t go further because there simply is NO ANSWER! For example, China. +, -, divide, square root, tons of problems, environmental issues, corruption, bubble, and so on, but the right side of the equal sign yields 12% growth in GDP, a record (some cities must be growing at 20%). So for now, despite the absurdities, it’s on a growth trajectory. America probably is not.

And thank you for reminding me of not only looking to the good when times are good. Just like real estate, and just like stocks. But it can also be told to America..who has a global foothold in every country, just as The Great Britain once did.