Thursday, June 18, 2009

Response to a "likely story"

This guy’s theory is juvenile, an old doomsday theme and ignores the natural balancing act of the free market. If the dollar drops, US goods become cheaper to export and imports shrink because they are too expensive. If the dollar drops, paying back the loans becomes cheaper and all the foreign banks lose, including the Asians who have invested heavily in North America.

The restructuring of the US steel industry led to increased competitiveness, the auto industry will follow in 2-3 years. The desperate situation has allowed for a hastening of the needed cost cutting and the leaner result will be very competitive when the market returns.

America was first into the recession and will be one of the first out again. (if not the first) These developing countries need the US market for their products and they will suffer worse if they dry up.

Their protectionism will hurt them more than help them , we’ve seen this in the past and their banking systems have been disasters at times.

It is a global market today and the balance will be maintained over time. In the end, competition will determine the winners. I also wouldn’t be so quick to write off the will of the US people, if Obama allows the natural process to occur and doesn’t legislate too much expensive socialism, the competitive spirit will fight back and US industry will be even stronger. Everyone in North America will reap the benefits from this.

If all else fails, they will just nuke the bastards……….isn’t that why they overspend on “defense”?


Chris Johnson

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