Chapter 11. A Decade of Frugality: Making It with Less Money
Americans Are In for some surprises—and not pleasant ones—in the next few years. The decade from 2010 to 2020 will be a period of severe adjustment for the U.S. economy, and even more so for U.S. citizens themselves. U.S. residents are accustomed to the perks of living in the world's wealthiest nation, but as I have shown throughout this book, this is no longer the case, not by a long shot. We are now living in the world's biggest debtor nation. Sooner or later, U.S. lifestyles will have to adjust to this new reality.
The Cause . . .
I've been sounding a warning for years about the huge adjustment both U.S. residents as individuals and the United States as a nation will have to make when the seemingly endless supply of foreign credit dries up. This has in fact already begun and continued to gather further momentum after this book came out. As I explained previously, the dollar is losing value against other world currencies, a trend that will continue as a result of the loss of our industrial base, the decay of our infrastructure, ongoing levels of consumer debt, and huge trade and current account imbalances.
The dollar's downward slide is painful not only for U.S. residents as their purchasing power erodes both at home and abroad, but also for our foreign creditors, who have watched their investments in the United States lose value when measured in their own currencies. Those losses are starkly worse if they invested in mortgage-backed ...