US Economy and Global dominance at risk: "The US is frighteningly dependent upon foreign cash inflows to finance its huge deficit. This increasingly places the very solvency of the US economy in foreign hands. The US currently runs an account deficit of 5 percent of its GDP, a record high, which cannot be maintained indefinitely. Crude-oil imports account for a sizable portion of this current account deficit, and become increasingly significant as the global price of oil elevates. An orderly decline of the dollar by about 40 percent, far greater than the overall 8 percent (about 20 percent against the euro) seen so far, would be required to help shrink the dangerous current account deficit. However, such a decline presents a range of other problems that are considerable in their impact and risk.

"As the dollar declines, oil producers, which currently price their exports in terms of US dollars, seek to hedge against the lessening of their real profits resulting directly from the dollar decline. They do this by pegging the price of exports to a more stable currency with fewer structural problems, the euro. Evidence compiled by James Turk, founder of Goldmoney.com, strongly indicates they may already have established a de facto but undeclared peg to the euro. As a result, oil producers artificially inflate the price (in dollars) of oil to hedge against a weaker dollar, and that puts increasing upward pressure on the US current account deficit, which puts further downward pressure on the value of the dollar. A vicious cycle has already ensued. The likely effect is an eventual not-so-orderly decline in the value of the dollar. This can have a catastrophic impact upon the US economy and upon the global economy as well.

"In fact, the only reason the decline of the dollar has not been disorderly (or even catastrophic) already is the fact that the Asian economies, most notably Japan and China, have so far continued to purchase enormous amounts of US debt in an effort to keep their own currencies from escalating out of control against the dollar. Notably, private investors who formerly purchased US debt have mostly abandoned that practice out of fear of holding too many dollars, and that slack has, so far, been taken up by the Asian central banks. The entire situation for the US economy is very unstable and filled with risk. The fact is that there currently exist so many imbalances, many firmly centered in the US economy, but extending outward to affect the global economy, that no one can say with any authority precisely what all the risks are, or what the future holds, with much accuracy. However, one thing that is certain is that because there exist so many deep structural weaknesses and very considerable risks, the US economy no longer commands the global respect and confidence it once did.

"In fact, doubts about the stability and permanence of US wealth are deep and wide. The dollar is in steep decline over concerns about the structural integrity of the US economy. The rest of the economies of the world are increasingly concerned about having their economic security hitched so permanently and intimately to the US economy alone. "The neighbors are beginning to talk" about the need to pursue a course of increasing economic independence from the US. What they are saying is evidence that the formerly unquestioned economic power and earned global trust of the United States is in serious decline... The US foundation is already seriously damaged, as evidenced by global nervousness and fear of a serious, or even catastrophic, US dollar decline. The US is doing very little, if anything, to reassure the world and calm the jitters. In fact, it is continuing to spend itself into an indebtedness "oblivion", spending on hugely expensive domestic programs, on an ever-increasing military budget and on hugely expensive military invasions and nation-building. All the while, deep tax cuts have also been enacted. How much longer can the economic charade continue, while the United States refuses to make needed reforms and to take other required actions to strengthen, rather than weaken, its own economic strength?"

"we increasingly are seeing - collective moves and action to bring balance to the international system. Such pursuit of geopolitical balance may overshoot the mark, however, actually resulting in a disorderly and rapid decline of US global power... The real problem with the current international system is that structurally, as it moves toward multipolarity, most factors weigh very heavily against an orderly decline of US economic and/or military power. Immensely important vulnerabilities and weaknesses exist that make a disorderly, or even a chaotic, loss of US economic and/or military power much more likely."

The neoconservatives, with their arrogance and unilateralim, have practically invited the rest of the world to pull the plug on the US economy. In the end financial and economic bankruptcy may be the only thing that can rein in the Pentagon.

US Economy and Global dominance at risk: "The US is frighteningly dependent upon foreign cash inflows to finance its huge deficit. This increasingly places the very solvency of the US economy in foreign hands. The US currently runs an account deficit of 5 percent of its GDP, a record high, which cannot be maintained indefinitely. Crude-oil imports account for a sizable portion of this current account deficit, and become increasingly significant as the global price of oil elevates. An orderly decline of the dollar by about 40 percent, far greater than the overall 8 percent (about 20 percent against the euro) seen so far, would be required to help shrink the dangerous current account deficit. However, such a decline presents a range of other problems that are considerable in their impact and risk.

"As the dollar declines, oil producers, which currently price their exports in terms of US dollars, seek to hedge against the lessening of their real profits resulting directly from the dollar decline. They do this by pegging the price of exports to a more stable currency with fewer structural problems, the euro. Evidence compiled by James Turk, founder of Goldmoney.com, strongly indicates they may already have established a de facto but undeclared peg to the euro. As a result, oil producers artificially inflate the price (in dollars) of oil to hedge against a weaker dollar, and that puts increasing upward pressure on the US current account deficit, which puts further downward pressure on the value of the dollar. A vicious cycle has already ensued. The likely effect is an eventual not-so-orderly decline in the value of the dollar. This can have a catastrophic impact upon the US economy and upon the global economy as well.

"In fact, the only reason the decline of the dollar has not been disorderly (or even catastrophic) already is the fact that the Asian economies, most notably Japan and China, have so far continued to purchase enormous amounts of US debt in an effort to keep their own currencies from escalating out of control against the dollar. Notably, private investors who formerly purchased US debt have mostly abandoned that practice out of fear of holding too many dollars, and that slack has, so far, been taken up by the Asian central banks. The entire situation for the US economy is very unstable and filled with risk. The fact is that there currently exist so many imbalances, many firmly centered in the US economy, but extending outward to affect the global economy, that no one can say with any authority precisely what all the risks are, or what the future holds, with much accuracy. However, one thing that is certain is that because there exist so many deep structural weaknesses and very considerable risks, the US economy no longer commands the global respect and confidence it once did.

"In fact, doubts about the stability and permanence of US wealth are deep and wide. The dollar is in steep decline over concerns about the structural integrity of the US economy. The rest of the economies of the world are increasingly concerned about having their economic security hitched so permanently and intimately to the US economy alone. "The neighbors are beginning to talk" about the need to pursue a course of increasing economic independence from the US. What they are saying is evidence that the formerly unquestioned economic power and earned global trust of the United States is in serious decline... The US foundation is already seriously damaged, as evidenced by global nervousness and fear of a serious, or even catastrophic, US dollar decline. The US is doing very little, if anything, to reassure the world and calm the jitters. In fact, it is continuing to spend itself into an indebtedness "oblivion", spending on hugely expensive domestic programs, on an ever-increasing military budget and on hugely expensive military invasions and nation-building. All the while, deep tax cuts have also been enacted. How much longer can the economic charade continue, while the United States refuses to make needed reforms and to take other required actions to strengthen, rather than weaken, its own economic strength?"

"we increasingly are seeing - collective moves and action to bring balance to the international system. Such pursuit of geopolitical balance may overshoot the mark, however, actually resulting in a disorderly and rapid decline of US global power... The real problem with the current international system is that structurally, as it moves toward multipolarity, most factors weigh very heavily against an orderly decline of US economic and/or military power. Immensely important vulnerabilities and weaknesses exist that make a disorderly, or even a chaotic, loss of US economic and/or military power much more likely."

The neoconservatives, with their arrogance and unilateralim, have practically invited the rest of the world to pull the plug on the US economy. In the end financial and economic bankruptcy may be the only thing that can rein in the Pentagon.