If America suffers a big depression then the rest of the world will probably be in much worse conditions economically.
US will be hardest hit, with EU close behind. This is because of what I have long been calling the US's foolish abandoning of the cities for the "suburban infrastructure" that assumed cheap liquid fuel was "forever." There is not enough time left for the US to undo this stupidity - make good urban schools, safe urban streets, public electric transport, "high-rise" housing near the urban centers, parks for people sharing* these "high-rises" buildings with light industry/offices, replace its fleet of "gas guzzlers” with at least the smaller more efficient cars most Europeans already drive, restore the rails to what they were 50 years ago, etc. - not enough time, not enough money especially with steel, concrete, food, etc (not to mention fuel)** more expensive in real terms than when the current foolish suburban infrastructure was built - that was so long ago (end of WWII) that much of it is poorly maintained: the bridges fall down, 80 year old water mains break, factory close as too obsolete to compete (steel in US is still made in WWII plants that needed tariff protection only two years ago to avoid bankrupcy, but have been returned to low level profits by the more than doubling of the price for steel) etc. In contrast, China and Asia in general are booming*** and will still, even when US and EU are in depression, have higher growth than the US average of the last decade! Countries like Brazil, Australia / N.Z. and other suppliers of iron ore, minerals, food stocks, and energy will be growing some too as "economic colonies" of Asia. Morgan Stanley, just today forecast oil at $150/ barrel by 4 July (2008). By end of 2008, I forecast $5/gallon gas in the US unless there is a "tax holiday" (more stupidity) or the depression has already started. Empires typically fall much more rapidly than they rise. Hold on to your hat on the way down. (Perhaps you can trade it for a hot dog when hungry -$5 will not buy one then because the US treasury will be paying off the maturing bonds, which no one will roll, with "printing press" dollars.) ----- *Elevators are extremely energy efficient, non-poluting in urban area at least, way to commute to work if you need to be in face-to-face contact. **See final "PS" just added to my prior post ***China is building an afluent middle class with rapidly rising REAL wages. Their spending grew 18.8% in 2007 YoY. They are eating better, more meat and that caused soy bean inports (3 million tons in 1998) to become 30 million tons last year! China now inports corn, instead of exports it. etc. Also the rich Chinese are the world's largest and fastest growing market for many luxury goods now. They take week-end trips to Japan just to shop and spend several $1000 /day on average!
The US government decision (from 1970 to now) to not tax gasoline the way the European nations did was almost treason. Did the American politicians have no loyalty to young Americans and future generations of Americans? The car culture did create a certain pleasant sort of freedom but it was so obvious that the car culture would not be sustainable. The car culture also hurt the US balance of trade. The American car culture created suburban sprawl over quality farm land. The car culture was bad for global warming. The car culture pushed forward the date of global peak oil. The car culture of the past 45 years will make the USA a porer nation for the next 45 years.
Here is an interesting article that may show you which countries are doing great.... http://www.spiegel.de/international/world/0,1518,558217,00.html
In Europe the Diesel price is same as gasoline. We somehow messed it up so that there are hardly any diesel cars sold in U.S. The other issue is that U.S. does not have any real energy policy. We have been too busy fighting wars for a long time. 95% of the time of a President is spent on foreign activities rather that looking after the domestic issues.
Yes. But I add a comment about what could have been. If US had made smaller cars it would be better position now to make them Flex-Fuel and be exporting them to Brazil etc where more than half the cars run on 100% alcohol now. Instead Brazil is now making 300,000 cars /month and exporting many of them. Once a market is lost it is hard to gain back, especially when already well supplied by large low-cost established producers. - I guess the US did not need those manufacturing jobs. Please Register or Log in to view the hidden image!
