The US economy is sagging. Current efforts to ward of a recession include a 75 basis point reduction in interest rates and possible tax concessions that would cost billions of dollars. Such measures will do nothing to address structural problems in the economy and are likely to just lead to consumption of whatever relief is given to the public.
Barack Obama is campaigning to correct whatever is not working in Washington and it is evident the public, well the democratic constituency anyway, is right behind that idea. With almost 3,500 US soldiers dead in Iraq and many others wounded, at a cost of over $250billion, the current administration has done serious damage to the economy on the pretext of WMD's that evidently never existed.
The US has been the world's reserve currency for decades, having superceded gold under the Bretton-Woods system. This has provided America with significant levels of low-cost liquidity. But recently, nations have been diversifying their reserves away from the dollar, further undermining an already vulnerable economy.
US debt is fast reaching the size of the economy, at close to $10trillion. Economic contraction would probably close the gap quicker, but a run on US reserve funds could send the Dollar south and mortally wound the economy.
This is all happening at a time when Russia, sensing blood, is trying to assert its presence in the world arena, through active military exercises in NATO backyards. Russia is also pulling strings in the middle east, using the frothy-mouthed Ahmadinejad to front its ambitions. The bible predicted a dangerous alliance between Russia and Iran, but US economic woes provide a power vacuum that is advancing their cause and bringing the middle east closer to a dangerous level of military precipitation.
Can the US still maintain a buffer to military aggression in the middle east in these uncertain times: with diminishing financial options, elections and a loss of international influence?
Indeed, could the very peace that the US tried to preserve through its military activities, be lost to its own domestic problems and could it end up doing more damage to itself than extremists ever hoped for? I hope not.
Barack Obama is campaigning to correct whatever is not working in Washington and it is evident the public, well the democratic constituency anyway, is right behind that idea. With almost 3,500 US soldiers dead in Iraq and many others wounded, at a cost of over $250billion, the current administration has done serious damage to the economy on the pretext of WMD's that evidently never existed.
The US has been the world's reserve currency for decades, having superceded gold under the Bretton-Woods system. This has provided America with significant levels of low-cost liquidity. But recently, nations have been diversifying their reserves away from the dollar, further undermining an already vulnerable economy.
US debt is fast reaching the size of the economy, at close to $10trillion. Economic contraction would probably close the gap quicker, but a run on US reserve funds could send the Dollar south and mortally wound the economy.
This is all happening at a time when Russia, sensing blood, is trying to assert its presence in the world arena, through active military exercises in NATO backyards. Russia is also pulling strings in the middle east, using the frothy-mouthed Ahmadinejad to front its ambitions. The bible predicted a dangerous alliance between Russia and Iran, but US economic woes provide a power vacuum that is advancing their cause and bringing the middle east closer to a dangerous level of military precipitation.
Can the US still maintain a buffer to military aggression in the middle east in these uncertain times: with diminishing financial options, elections and a loss of international influence?
Indeed, could the very peace that the US tried to preserve through its military activities, be lost to its own domestic problems and could it end up doing more damage to itself than extremists ever hoped for? I hope not.
(c) Peter Eleazar at www.bethelstone.com
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