There was a time when the Greenback was the most covetous note of legal tender even in the remotest part of the world. The American home, the American car, the American dreams and all things American were the most treasured & desired the world over. Ironically, since Barrack Obama who was elected solely on the premise of change, it’s the ill-wind that’s blowing nobody any good! But whatever happened to the power wielded by the Americans?
They say that truth is sometimes stranger than fiction. It is definitely strange to hear that American tourists are finding it hard to exchange a $100 bill on the street in Asia. Most of the money changers would rather take euros, Singapore dollars, even Chinese Yuan for fear of the sinking exchange rates. It just seems impossible that the Greenback is flatly rejected!
Along with the rejection of the dollar is the American Express card. Once the prime of all the cards, it is being turned down in many Asian establishments, though the MasterCard & the Visa are still acceptable. Locally grown cards are fast replacing the American ones.
In Asia would you believe that there’s an on-going joke in this present financial crisis that in the US even your pet could secure a credit card or a home mortgage? This is indeed laughable!
For too long, the Americans refused to believe that there was anything wrong with their living lifestyle, consuming far beyond their means, easy credit, greed being their creed and juggling repayments, if ever that being possible, with their string of credit cards. Under such circumstances, the word ‘budget’ does not come into play or is ever heard of. “No worries!” that what the Aussie is famous for saying.
Simple plain logic would tell you that you can’t keep on going on a spending spree without having the problem of repaying. Debts cannot be written off like relying on bankruptcy. It may seem grossly unfair that the same privilege extended to big company like General Motors is not for the man in the Main Street. Washington is definitely looking out for the big guns, bailing them out in distress, while the workers, most deserved of help, are left to struggle for their survival.
It’s the ill-wind that blows nobody any good. There has been no fundamental changes in the way that Washington functions. Ever since 1971 when Nixon did away with the Gold Standard of Exchange, Washington has most conveniently financed its way out of debts by resorting to steep borrowing with its sale of Treasury notes & bonds & the Federal Reserve printing more “fiat” paper money.
Historically, this has been the trend of funding its excessive expenses such as the Vietnam war. That is how US avails itself the tremendous edge & has been enjoying an exclusive privilege that allows the Americans to spend & spend, a case of over-consumption, to be subsidised by the rest of the world.
In so far as the US government guarantees to honour its value and the rest of the world accept it as legal tender, the dollar plays its role. In fact, the system works extremely well for the US, far too well, that whenever it ran short of money, it conveniently printed or print its “fiat” money as required.
Emerging economies – China, Russia, India,Brazil (CRIB) – have enough with being dominated by the US Dollar. Enough is enough of the sleepless nights in Beijing where it risks devaluation of its trillions of foreign assets held in US Treasury bonds. China has been urging a change in the medium of trading exchange & has in fact taken leading steps in reducing its purchase of US Treasury bonds.
China has been encouraging its 1.3 billion population to invest in gold & silver, while converting more of its US currency holdings as well. It’s working hard at converting its billions of US dollars before the Greenback tanks. Already, it has even started with its Yuan as the means of trading exchange among the Asian emerging countries in five key cities in Pearl Delta Economic region including Hong Kong. The initial attempt appeared to be working very well indeed.
It’s reported that this month, the Hong Kong Monetary Authority has removed all its physical gold holdings from the depositories in London and transferring them to a high-security facility close to Chek Lap Kok airport in Lantau Island.
It goes to show that China has fundamentally lost confidence in the US dollar & is shifting its to a partial Gold Standard through reserve accumulation. However, China has to do so carefully so as not stimulate the market.
Is there no end in sight of the US sky-high deficits, record shattering borrowing by the US Treasury & the runaway printing by the Federal Reserve? The US government’s official debt now stands at an all-time high of $11.8 trillion – that’s over $100,000 for each & every household in America. Over the next 10 years the cumulative effect would be another $9 trillion, bringing the burden per household to $177,000. Other total liabilities & the unfunded government IOUs on Social security, Medicare & Federal Pension payments would push skyward the debt burden of over 1 Million Dollars per household!
Do you begin to see how bleak & gloomy down the posterity lane? The days of prosperity are gone for the American family. Together with its descendants, the American family would have to toil for the next 429 years just to pay off its national debt, assuming every family can save 5% of its income & channel towards its repayment. This is indeed a serious indictment!
A Chinese by Descent
An Australian by Consent
Tuesday, 15 September 2009
Related Articles by the Same Author:
Plain Old Greed . . . An Unwanted Creed
General Motors Today . . . America Tomorrow?
If You Stall . . . Others Roar
Chinese Leaders Jet-Setting The World On Buying Spree
US “Toilet” Paper Money
The Four Alphabets Of Economic Recovery
The Japanese Dilemma
Western Democratic Imperialism