Demise of the Dollar, 3rd Edition

CHAPTER 8ALAS, THE DEMISE OF THE DOLLAR

When written in Chinese, the word crisis is composed of two characters. One represents danger and the other represents opportunity.

—John F. Kennedy

The global economy is continuing to change, as it will. The US dollar remains on the front lines of change as its reserve currency, for now. When we take a look at history, we see how past events have affected everything. The Black Death created a devastating labor shortage throughout Europe for decades. Christopher Columbus's voyages turned trade upside down for hundreds of years. The industrial revolution moved economic power in ways that continue to affect economic balances to this day. And now we face another great shift, away from US dominance of world markets and toward new leaders—China and India.

The economic reality—a type of geography—is changing. As a consequence, real estate speculation in New York, Chicago, and Los Angeles may be replaced with more global interest in the new real estate markets—in Beijing, Shanghai, and Bombay. Who knows? We can only anticipate how changes will occur based on what we observe today. Does this mean the age of America is ending? No, it simply means that economic muscle will be flexed by someone else in the future. This is a trend. And like all trends, they are more easily viewed in historical perspective but harder to judge from their midst.

When we look at trends in dollar values, we can observe that incomes have not declined. That's great. But ...