[lbo-talk] Coming Currency Shock

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Tue Nov 30 19:27:08 PST 2004



> maybe it's that I'm unclear on many fundamental economic
> concepts, so the situation is confusing, i.e. America is
> running unsustainable policy ...

Almost anything is unsustainable; the question is usually how will this unsustainable activity come to an end? For instance: the current rate of use of oil in the world is unsustainable. But will it result in an ice age, or will we shift to different fuel technologies before it gets that way, and will we get better at extracting it, etc. -- all things that "change" the present situation, which was, as we said, unsustainable -- ...? Similarly population: will we die a spectacular ebola-like death, or will other structures (say, food production/distribution) change to accomodate?

The Boston Red Sox always losing the World Series was unsustainable.

Reach for your wallet when someone starts a sentence with "If things stay the way they are ... [doom & gloom]" ...

The fact is: we have very little idea what it "means" for the US to continue in this fashion; it's already past the point where the budget and trade deficits are larger, on a percentage basis of GDP, than what was called a "collapse" in Argentina a few years ago. And yet: the US is not Argentina. So where does that leave us with the analysis? We know that kind of thing wrecked Argentina, but it hasn't wrecked the US. So something is amiss with the analysis.

Stay tuned!

/jordan



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