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Tuesday, February 28, 2006

How long will US economy survive?

How long will the US survive as an economic superpower? Writes Prashant Bhushan in Tehelka weekly. "It has been living on borrowed money for someime.

Its external debt is more than 50% of its GDP as Saudi oil money and China's trade surplus piles up in American banks. The US dollar is kept afload today mainly by the oil trade in US dollars. 

The US economy will tank if either China withdraws its money from the American banks or Saudi Arabia stops depositing its oil money in US bonds, or even if the oil trade goes off the dollar.

Thus even if we assume that we can get something in short run, how long will it last?". Bhushan, a public interest lawyer, has writen quite an interesting piece 'The eveil behemoth cometh' on Bush's visit to India and the euphria in the country. He questions that how reliable ally US can be to India.

Urdu papers on Bush's visit

Rashtriya Sahara Urdu daily has been printing a full anti-Bush page for the last several days. Read the headlines: Islam-dushmani ke field marshall: Bush, Ekkiswin sadi ka aadam khor bhedia, Duniya ka napasandeeda tareen insaan Bush amongst others.

Giving vent to their anger and reading what people want to read makes them feel lighter. That's why quite a strong anti-Bush sentiment in all Urdu papers. [A few years later the US Economy did collapse. When this post was published, people thought it was mere anti-Americanism and wishful thinking. So now?]


Ashraf's Pen said...

I think you tend to oversimplify the matter.
The questions of growth of economies has been the focus of unlimited Phd's and still is one.
The US economy may be unhealthy but its still very robust.
Its their consumer spending which changes things.
I am not sure about the oil money but it cannot be so imp that the economy will collapse.
Else this would have been used as a bargaining tool in diplomacy long back.
The US economy is so Good just because it is so huge.
Most of the fortune 500 companies are US based .
Just a sign of the times.


Jonathan Versen said...

hello indscribe,
you are correct that the US economy is vulnerable, but the US press behaves like nothing is wrong, and even though we ostensibly have a free press, in truth we have a cowed, corporatist press that paints an artificially sunny picture for ordinary Americans to see. Actually I think ordinary people here are more worried about it than the elites are.

indscribe said...

Ashraf Bhai...That's Prashant Bhushan's piece that I have quoted. I am not saying or oversimplifying. And US economy may be robust but oil definitely is the most important factor. The world moves on oil. The monarchs were installed by UK and need the US-UK backing so they can do anything for them. They are too weak in their hearts to bargain. It was UK that gave Arab to Saud family and turned the Arab into Saudi Arabia. How sad, a family's name became part of Arab and the country their fiefdom!

28 February, 2006 10:55