THE US HAS A national debt of over $8 trillion, plus a trade deficit of $800 million per year.
The export of US businesses and jobs has forced the US to buy many of its essentials from foreign countries such as China and India. These losses of business are a direct result of US government policies and actions. The loss of America’s manufacturing industry forces Americans to buy from other countries, and that is showing up as a massive trade deficit. N.B. Australia uses similar policies and we’ve got a $500 billion debt and buy most of our manufactures from China.
Since the US isn’t making it, it’s not earning as much money as it was so it’s harder and harder to pay off the gathering debt. The US dollar is now overvalued to the extent of US debt to the world — $8 trillion and rising. If countries sold US dollars, then forecasts are that the US will suffer hyperinflation and economic collapse.
It seems that the only thing really holding the dollar up to its current value is the fact that all oil is traded in US dollars, which means that all countries must hold US dollars to make oil purchases. Iraq, and Iran, and now Russia are proposing to open oil sales outlets (bourses) using Euros and Roubles, thus potentially breaking the US stranglehold on oil, and on the global economy. The US wants to retain control of oil pricing and is acting threateningly towards any country that offers the choice to buy oil in non-US currencies. Choice of course means ‘having the freedom to decide’, it seems the US does not want other countries to have the freedom to decide how they pay for their oil.
Whether the non-US$ oil bourse argument has legs, or whether it is the US’s own unsustainable reliance on debt funded growth, it raises the question, why, when the US is starting to strongly resemble the Titanic, are we hitching our boat to the Bush administration while telling the rest of the world how to behave towards the US? Wouldn’t it make more sense to remain open to the possibilities of alliances with different groups of countries. After all, if oil is going to be a problem, we’re better off working with our neighbours than with the world’s greatest oil user … the USA. Are there any pragmatists out there? Or is the fossil fuel industry totally dominating the federal government, risking our future for their profits?
What Australia needs is government policies geared to energy shortages so that if energy does become unaffordable, we have a way forwards. The current policies will just leave everyone fighting for what little energy remains … not a pleasant thought.
