Will America fall from its Superpower status?
Many of us, including myself, think that the current credit and financial crises is the first major step towards the fall of America as a world financial superpower. Looking at how far the market has fallen, the massive layoffs occuring more and more, and the total embarassment we feel because “we should have known better”, you would definitely think that some other country is a prime spot to jump ahead of the United States is the world power rankings.
But when you open your eyes to what else is happening in the world economies, you get a different picture. America isn’t the only one who made mistakes. This article from CNN brings to light what’s happening across the globe in other wannabe superpowers:
But economists including Stiglitz are nearly unanimous: The United States won’t lose its position as the world’s financial superpower because foreign economies are slowing just as fast as America’s, their debt levels are just as high, and the developing world is too reliant on the U.S. market to achieve significant growth on its own.
However, economists did accept that America won’t be going “over to India or China and tell those countries how they should run their banking systems”. We’re no longer trusted as the experts on how free markets should run due to the mistakes and greed across the financial, and consumer, levels.
Gas prices increased everywhere. Home prices fell almost everywhere (granted there are pockets everywhere that prices still increased, even here in America). The article even suggests that China has a housing bubble ready to pop. We’re not the only ones to feel the affects of poor judgement, inflation, or recession. It’s bad everywhere.
However, one thing to note is that the crap happening here in America is part of the cause of other markets failing. So many countries have their money tied up in U.S. investments and holdings, and when our market tanks, so does theirs. But looking at stock market losses worldwide, the U.S. market is actually down less than most European and Asian markets. Heck, the dollar is even rising against many foreign currencies (except when the Fed cuts the lending rate).
And China, the next expected superpower economy, doesn’t have it as easy as many Americans think:
With China’s unbridled economic growth spurt, there’s talk that it could one day overtake the United States. While that could happen several decades from now, China’s fate currently is directly tied to the U.S. If we don’t buy, they don’t grow.
China and other big exporters to the U.S. are laden with dollars – not because its a great investment – but because the U.S. buys so many foreign goods in dollars, argues J.P. Morgan Senior Economist Jim Glassman.
If they tried to switch to another currency, they’d have to sell those dollars and flood the market.
That would kill the value of the dollar and push other currencies up. Exports to the U.S. market would become much more expensive for Americans and because they lack large enough domestic markets it could kill their economy.
“‘Whether they like it or not, they are compelled to hold the dollar,” said Glassman. “We’re enabling their growth and development.”
So don’t expect the downfall of America to happen anytime soon. Sure, it’ll happen eventually, just like any empire before ours has fallen too. What goes up must come down, and that’s not just due to gravity. But if you’re really concerned about our economy failing completely, then I suggest learning Mandarin (enough people speak English in India, so don’t worry about that country) and converting your dollars to yuan right now, although the conversion rate stinks. But I’m no financial expert, so don’t listen to me.
I was worried until about a month ago and all the financial crisis news from around the world was released. Until then nothing was said of problems anywhere else. Right now is not the sudden demise that it started to appear to be. Also, as you say all powers before have fallen eventually, there is no reason that we will not eventually also. When I am unsure, and I hope that it is still hundreds or thousands of years away. But the fact that we are not innovating as much as we did before I am not sure how long we will hold the title.
I don’t think this will ever happen because other countries can’t survive without what we provide to us. Even though our country is getting hit hard on an economical stand point, other big countries are getting hit twice as hard.
The current financial crisis is indeed a global crisis. Iceland on the verge of national bankruptcy. Economic troubles throughout Europe.
And so the lameduck Bush administration is meeting Nov 15, not with the traditional “G7” group of wealthy North American and European world leaders, but with the G20, which includes emerging economies like Turkey, China and India. Sharing the “power” is inevitable as other economies are beginninig to wield enormous clout. Nothing lasts forever.
the world economy is bad because our economy is in the toilet.
the reason being, well, lets take china. the united states and the united states citizens are china’s biggest money maker. china lends us billions of dollars, as in loans. chinese made stuff is gobbled up by the united states citizens.
so what happens, americans panic and don’t buy stuff, so china’s companies net profit goes down. american banks fail, and the chinese govt orders their finiancial institutions not to lend americans money, hence screeching their net profits also.
when our cog stops, the rest of the world grinds to a halt.
not so fast. people make too much of russia and china. china will fall and it will fall hard, just like russia did and is doing again. china is and will be forced to increase controls, thus prices on goods, because that is what the global consumers are demanding. China has taken major PR hits from lead painted toys to tainted baby formula. China also cannot continue to retain cash reserves as their economy grows and inflation kicks in. they have far too large of a population to be holding such a large cash reserves. moreover, they are invariably going to have to exert interventionist foreign policies since it is costing them way too much to continue their non-domestic interventionist foreign policies. they are getting hit hard by high costs of energy capturing and are facing the same global terrorist threats. they are going to have to spend more and/or exert military might to protect resources.
many people outside the u.s. believe that regardless of what we say about how stretched thin we are in afghanistan and iraq, history has proven to them that we aren’t reliable enemies. we don’t follow doctrine, we are variable, we are resilient, and we are unpredictable. at the end of the day, there isn’t a single country in the world that can mobilize quick enough, project, retool and intervene its power (military, economic or otherwise) like the US. Many countries have depended on the US for defense protection, but many countries are having to increase defense budgets because they see that oh crap, the US might not be able to or want to cover our backs like we thought. don’t get me started on social homogeneity issues many other countries are facing.
@jerry, we have not lost insurance of influence, perhaps this is what it may seem in public statements, but behind closed doors where influence matters the most, that is far from the truth. look at how many countries went to bed with us after we invaded iraq and afghanistan. look at the europeans now, yeah they talk a good game, but it’s interesting how europeans have come full circle in their elected officials. what foreigners got wrong and what they continue to get wrong is that somehow they expected the US not to act like a sovereign country or a superpower when it only served US interests, although they themselves wanted us to treat them as sovereign countries no matter what. The US is expected to ask for permission when everyone else in the world doesn’t require it of themselves. the stark realization foreign countries came to with US action in Iraq is that, “oh my god, the US is actually a sovereign country and will do what it damn well pleases, just like us.” Foreign countries were holding their breaths for the US to bailout the crisis because that meant they didn’t have to do so or do as much.
US got a problem with a financial downfall, but they still have the power of technology and military so I guess the supreme power was still theirs. I’m not a financial expert nor speaker or representative but I guess the matter is they can survive from it.
Their is more than just the economic crisis. Look at Roman history and there is many similarities. The govemental curruption, declining moral values of scociety, collapse of the society as a hole, financial strain because of wars, and inflation. By just also comparing Rome as a whole America was created on the same fondation the Rome was created and now look at the once great emperior. GONE!
yes it is a sign of the fall of the US empire…i mean they had their time now is time for a new empire…hopefully the second coming of the spanish empire and rise of the Latin American nations towards the United Statian losers