Monday, August 23, 2010
Peak Empire: July 20, 1969
Consider how far the U.S. was ahead of the world technologically at this time; where was China, where was India, where were the smaller countries of East Asia ? The U.S. still represented 30 % of global manufacturing output. Even so, the post war expansion of Western Europe and Japan meant that a few years later the dollar was unable to hold the gold standard, and Nixon capitulated. The continuing story has been of eroding account balances and the long slide from the world's largest creditor to the largest debtor. At this point, the U.S. can no longer even hold a fiat reserve currency without eviscerating its middle class and large sections of its meritocracy. The decline is irreversible and there is no country that can take over the role of global arbiter. We will see chaos in the elite ranks, much like 1917 - when World War I terminally discredited the European ruling class and their global rule.