- 17 January 2007
Decoupling may be a myth, but according to this article the effects of the global economy are quite the reverse; basically the author argues that the US economy is unlikely to go down the gurgler (a) because it isn't in the interests of the Arabs or the Chinese for the US dollar to collapse (essentially because the Arab and Chinese economies are tied to the dollar), and (b) because they will actively pump dollars back into the US banks to ensure the banks don't collapse, ah la Citibank.
Interesting contrarian pov.
That's the trillion dollar question then - will the petrodollars and dragondollars (all in deflating US dollars) decide to prop up the USS Titanic or cut their collective losses? For several years the return form investing in the US has been flat to negative so combined with the final straw scenario unfolding now it's crunch time for the 2 US dollar hoarders - give back all those US dollar foreign currency reserves to keep the jalopy afloat or break free into a new world order removed from the us dollar.