Continuing the discussion about the downfall of the dollar or the collapse of the US economy, I want to know what
you guys think about the economy's future, looking at the next 50 years.

The US is still the richest and most powerful country in the world,
and contrary to what some people say, there is no reason to panic. But we have
to plan and think about this country's future. The European
Union is getting stronger and more modern. The Euro is now the standard world currency,
not the dollar. (The yen and yuan are important too, but the Euro does has the advantage of being used in over a dozen countries).

Asia is becoming a very serious competitor as well. Not to mention how the US owes a lot
of money to China and Japan.

I have already read the previous posts and I know that strong economic growth can
balance out a high national debt. I also know that it is not in China's best interests
to dump its treasury bonds. But looking at history, every superpower has declined
and fallen. The US will be no exception, most likely.

There is a lot that can happen to ruin the American economy. The oil squeeze,
tougher competition from Asia and Europe, war with Iran, several major terrorist attacks,
a lack of skilled workers due to baby boomer retirement, etc.

I repeat that I doubt anything major will happen soon. I think the US will be alright
for the time being. But it would be foolish to laugh off these concerns and believe that the
US will continue to thrive forever. There are some very serious challenges and we shouldn't
underestimate them. What do you guys think? I am not trying to make any political point
and I'm not looking for any partisan attacks or bashing. Whether you are right-wing, centrist, or left-wing, we all need to watch out for what might happen.

One more thing, would it be wise to create a savings account in Europe, and holding
on to some Euros? It's a strong currency and is probably the least likely to fall completely
in the event of a major global recession. (altho it would decline to an extent as well, of course)

"The Euro is now the standard world currency, not the dollar. "

Since when ?

red for cluelessness !

Either way, what I'm saying is that although we have no reason to panic
and will probably see a strong US economy for the next decade, we must start
planning for what comes next, because the serious challenges are many.
Oil is getting more and more expensive, and could very well go past $100 per barrel
as demand exceeds supply.

The chaos in Iraq and a possible conflict in Iran don't really help our economy much
either. Not to mention increased competition and other challenges.

Is it not wise to play it safe and try to protect yourself from a possible
US collapse? Buying Euros is one solution but there are other things too.
Any suggestions or feedback?

czarandy said:I would just split investments 50/50 between US/international.

If the dollar falls your international investments will protect you and if not they should still give good returns.

Good answer, green for you!
By all means, I will continue investing in US stocks and funds. I don't think
anything bad will happen in the near future. All I was saying was putting away
part of your investments in international markets or savings accounts, as a backup.
Maybe 80 percent US and 20 percent international. (altho currently it would be wise
to invest much more internationally instead of domestically, being that international
markets are growing much faster than the US right now)

If prosperity and progress for the United States would subside, then would it migrate elsewhere? Would another region of the world benefit at the loss of the US?

Besides the other nations in the developed, stable economies (G8, OECD, etc.), the rest of the world does not present much of an alternative to the current dominant economies. Some other states on the near periphery of the developed economies (China, Mexico, Eastern Europe, etc.) might also become "developed", but much of the world, in Latin America, Africa, and Asia, should require many more years of development, politically and economically.

chrisatspfld said:If prosperity and progress for the United States would subside, then would it migrate elsewhere? Would another region of the world benefit at the loss of the US?
Besides the other nations in the developed, stable economies (G8, OECD, etc.), the rest of the world does not present much of an alternative to the current dominant economies. Some other states on the near periphery of the developed economies (China, Mexico, Eastern Europe, etc.) might also become "developed", but much of the world, in Latin America, Africa, and Asia, should require many more years of development, politically and economically.

You should not confuse the concepts of "developed nation" with a "dominant economy." China will take more than one Olympic games to become truly developed, yet a hick up in it's economy will be noticed just as much as a hick up in US economy. And it's influence will continue to increase, not always real, sometimes perceived, nevertheless it is still possible to be "dominant" yet not fully "developed."

As far as who can pick up the slack, there is no need for it to be one country. Despite all the the trouble, EU's inclusion of Eastern European countries means they have much more room for growth. While Western Europe obviously tapped out it's capabilities of super fast growth, Easter bloc has not truly even started.

evlemonkfish said:Fifty years is a long time for assessment. Mostly likely there will 3-4 bear markets in the US, and hopefully double the number (or triple the duration) of bull markets.

I said 50 years, but economic collapse could happen much sooner, perhaps in 15 or 20 years.
Either way, this isn't about bear markets and bull markets. I'm talking about a very serious
downfall that would cause much hardship, lasting for several years. Something as bad as the Great
Depression of the 30's.

It's true that the US benefits from tremendous resources and a lot of clout.
But as history shows, all superpowers will fall. As strong as we are economically
and militarily, there is a lot that can happen to seriously dent our power. We depend
on oil for energy and well as for making plastic materials. But it's obvious that as global
demand rises, it will exceed the supply. China and India have a rising middle class that will
buy more oil for their cars and lifestyles. Those 2 nations have over a billion residents each!

There are other reasons to worry, as I mentioned before. War with Iran, major terrorist
attacks, increased competition, etc. We should never overestimate our abilities. We are a strong
nation but by no means are we immune to serious economic catastrophe. As China and the EU become
wealthier and more advanced, we will have to share the profits and the influence. We will no longer
be the only superpower, but rather one out of 3. That's a fair thing, they have a right to be powerful too. But naturally our wealth and clout will go down as others rise and share our
place at the top.

ifyouhavetoask said:

Something worse than the 1930's is coming this way pretty darn soon. Anyone with a shred of common sense can see that. However, you're not going to find too many FW members who see the signs. Too many Kool Aid drinkers around here, with delusions of getting rich with AOR's and $100 offers to open checking accounts.

The Fed made a decision to try to print us out of the corner we're in, mostly because that was their only option. It won't work, and is only making matters worse.

America will be fine in the long run, but we need to go through some serious pain the the short term, to equalize the credit-fueled stupidity of recent times.

Green for you. I'm not an alarmist and don't see any reason to panic but I definitely
see trouble ahead, and it won't be pretty. Although Greenspan was a smart Fed chairman
and had to do what it took to keep things under control, I think a lot of the credit decisions
could bite is hard in the coming years.

But regardless of whether you love Greenspan or not, we need to be realistic and be cautious
about the hardships we may very well have to face.

Asteroid colliding with Earth: Unlikely, but still very possible.

ifyouhavetoask said:Something worse than the 1930's is coming this way pretty darn soon. Anyone with a shred of common sense can see that.

I will go ahead and guess that you weren't around for 1930's, because the times were pretty darn bad and that doesn't mesh with your assertions that it's a short term "bad" times. Your "1930's" started in 1927 at the latest and did not end until WW2 came along, that's not very short term.

And please leave AOR out of this, it has ABSOLUTELY nothing to do with the topic or how people perceive current economic situation. As opposed to what you'd like to believe, you get most of your red for being off-topic (and unnecessarily combative), not for the actual opinion on the subject.