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quote:Originally posted by socralynnek
But I guess there would be a point when countries like China or Russia switch their savings from US-Dollar to Euro, which means the USA probably should take care of their currency, otherwise they might be losing economical power.
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They won't, because they have all these US bonds that will get even more worthless if the USD devalues even further. Besides that, the US imports a lot of their products, so it's in their best interest to keep the dollar up by buying more US bonds.
Some NY banker hotshot had the following example (note that this is not my version of the truth in any way):
7 asians and 1 american are stranded on an island. Each are assigned different tasks, like gathering food, fishing, wood et cetera. The american is assigned the task of eating. At the end of each day, the american eats a copious meal, and leaves just enough for the others so that they can perform their tasks again the following day.
So, the americans say (his words, not mine): see, Asia needs us to keep their economy going!
Nice story. The overall message of the show is that there might be some insecurity about how the downfall will affect Europe, but the general thought is that everyone will be better off besides the US. Somehow it makes sense, it's their debt not ours.
Ynnek: sure, there might be higher debts (Zimbabwe), but not from economies of this size. The Euro Zone has to keep it's deficit below 40%.