Undermining the US Dollar
Short economics lesson: Right now, the world's reserve currency is the US Dollar, primarily because it is used so much in commodities transactions - like oil. When foreign nations start selling off their dollar holdings like this en masse, it undermines the status of the US Dollar as that reserve currency and puts downward pressure on the dollar. If the US Dollar were backed by real value instead of just paper and good will, it wouldn't matter because other nations would be quick to snap these up, but since our dollar is currently fueled by debt and paper, it is a serious problem for the long-term stability and value of the dollar. When the world ditches the US Dollar as its reserve currency, our debt problems will put us into an inflation-based hole we will never climb out of and our economy will crash, and it will take others with it. It will be worse than the Great Depression, with only those holding real value surviving.
I hope it doesn't come to this, but I fear the car is already tumbling off the cliff.
I hope it doesn't come to this, but I fear the car is already tumbling off the cliff.
Wait!
American people and businesses are now getting the benefit of those lower prices. Instead of wasting the scarce resources on a consumable, oil/energy, the resources may go into better investments and hard goods. If those were made in the US that would stimulate employment. At least the spending will be on products that last longer than a tank of gas. Thats good, and in my estimation it more than makes up for the belt tightening by wealthy Arab sheiks. It strengthens the US economy and that will have a positive effect on the value of the USD. (Granted, the fedresbank's continued enriching banksters at taxpayer expense and stupid deficit spending for war materials at home and abroad (another consumable that destroys instead of producing) continues to destroy the USD.)