http://seekingalpha.com/article/54831-the-5-stages-of-grieving-over-the-u-s-dollar
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Finally, stage five, acceptance. The foreign currencies rise to sustainable levels versus the US dollar. Inflation and real economic activity decline in the foreign countries. They begin buying more goods and services from the US, and dollar claims are redeemed. Inflation and interest rates rise in the US, as we have to produce more to pay off the dollar reserves now being redeemed by foreigners. (Send us goods and it will pay off your debts! Amazing how the US got good terms on both sides of the transaction.”)
Well, maybe. It will take a while before all major trading parties in the world float/adjust their currencies to fair levels. At the time that happens, though, it will be obvious that the US is less important to the global economy. The relative value of all US assets will be a smaller proportion of global assets, though it will still likely be the largest share in the world. My view is this process to get to stage five will take no more than 10 years.
By that point, the hopelessness of Federal social insurance programs like Social Security and Medicare, plus underfunded Federal and state retirement plans, will force benefit reductions and tax increases on the US, and crimp borrowing capacity, unless they borrow in a currency other than dollars.
There are five stages of grieving for US social welfare programs as well, but I am afraid we are only in the first stage now, denial.
That is a topic for another day, and not one that I am excited to talk about.
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Happy tday! Enjoy it. The tough times are most certainly coming.
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Reinke Faces Life 