The US is able to survive such enormous deficits only because the US
dollar is the world reserve currency. This role for the dollar is
nearing an end as the world looks for more stable stores of value.
Although oil is still nominally priced in dollars, in reality it is
being priced in euros as oil producers raise the dollar price with a
view to keeping their oil revenues at a constant purchasing power in
euros.
When the dollar loses its reserve currency role, foreign financing for
US trade and budget deficits will eva****ate. US living standards will
collapse, and the indispensable omnipower will be just another washed
up country.
For a world weary of =93American exceptionalism,=94 this can=92t happen
too
soon.
--------------------------------------------------
Paul Craig Roberts was Assistant Secretary of the Treasury in the
Reagan administration. He was Associate Editor of the Wall Street
Journal editorial page and Contributing Editor of National Review. He
is coauthor of The Tyranny of Good Intentions.He can be reached at:
PaulCraigRoberts@[EMAIL PROTECTED]
