It's the US $ economy stupid

[Terrance]

No US hegemony? 
The US is a Nation in Decline? 
Bush is a saloon cowboy? 

I doubt it. 

Take a look at economy and the dollar. 


Take a look at the huge engine that is the United States
economy. Henry Adams could never have imagined a dynamo so powerful. 

And remember that the US, unlike Europe,  is a united states, its
trading partners are also united states--Canada (1), Mexico(2). Brazil's
new president is bending over backward to do business with the US. 

The EU is struggling, as is Asia, and the US remains the only powerful
engine pulling its weight and the weight of the world too. 

The growth dynamic of the global economy is and has been pulled by a
single engine. And like it or not, W is driving that train. 

If the US train stops, the world stops too. When the US locomotive heads
down hill, the world economy is dragged along. When the US climbs, the
world economy climbs. And when the US crosses a bridge into Iraq, the
world will follow it. 

When America boomed at the start of the second Clinton term, the world
was quick to follow. The reverse was true when America headed into
recession at the end of Clinton's second term. And an extended and
exacerbated (9-11) slump in the US economy has been more than matched by
growth shortfalls elsewhere in the world. 

Lacking an alternative growth engine, the global economy is out of
balance and if it continues it will certainly derail.  

What does it take to re-balance the world economy? 

War? 
NO! That won't help at all. Only fools and propagandists think that War
in Iraq will be good for any economy in the world. It will be a negative
on every balance sheet. 

The dollar? 
Yes. 

All the public statements of France and Germany, all the nonsense about
the Us wanting Iraq's oil, ignore what is going on in the economies. 


At market exchange rates, the United States accounted for fully 64% of
the cumulative growth in world GDP from 1995 to 2002. 

64% is a huge imbalance. 


But that's only the direct contribution.

A US-led global trade cycle has also played a powerful role in driving
world growth since the mid-1990s. The surge in global exports over the
1995-2002 interval explains 51% of the cumulative growth in world GDP
over that period. 


Adjusted for PPP,  US accounted for approximately 40% of the cumulative
growth in PPP-based world GDP since 1995 (direct US GDP effects plus
trade impacts, combined).

Huge engine. 

It’s safe to say the US has been the sole engine of global growth for
over eight years.

The French and the Germans may not want to sign on to protect Turkey
today, but they will soon enough. The dollar trumps a veto in any game
the French choose to play.

Very dangerous world. Economic imbalance is nearly as dangerous as
Saddam.