The Politics and Economics of a Falling Dollar

According to a recent article in the Washington post author Steve Pearlstein argues that national problems in the United States are really global finical crises in disguise. Pearlstein’s bold claim goes back to the restructuring of the world economy in the 1940’s, as Pearlstein notes after World War II and the collapse of previously dominate nations the United States and other nations were forced to restructure the world economy based upon the dollar. However the transferring of the dollar to foreign nations has allowed clever individuals to manipulate the value of the dollar and allows the United States to borrow beyond its means. The article also discusses the macroeconomic imbalance and disequilibrium created by Asian nations such as China, and Taiwan using the dollar as much of their currency. Furthermore Pearlstein argues that the dollar being the main base of currencies around the world is rooted in an old mindset beginning in World War I and ending after the Cold War. However as time passed European nations and Asian nations alike have been allowed to grow their economies creating disequilibrium in the international arena, and shifting the tide away from the United States previous influence. Pearlstein concludes noting that the dollar will decline the question is merely how fast and when. He notes that the United States national problems are actually related to growing influence internationally, other nations currencies have grown and some people are getting more creative on how they use a dollar.( unlike the United States). Feel free to post comments related to macroeconomics and the dollar.
Blake A.