The United States Gets a Run for its Money

by MsMcReality | July 11, 2008 at 09:27 am | 468 views | 8 comments

It has long since been known that the United States was is the most powerful nation in the world. Although this may be true, there has been much talk about the nation's economy becoming unstable. If the enconomy continues to tank, will ther be a new number 1? The answer is yes. In a close second and soon-to-take-over, comes China, the most populous nation in the WORLD. "China's economy will surpass the U.S. by 2035 and will be twice its size by the middle of the century." Between the months of January and April China's exports to the U.S. have netted over $75 billion and was not even hindered by the recent earthquake that killed more than 69,000 people. Congress is going tarrif-crazy on good imported from China. The world ltrade organization would tear down a law as such. Barack Obama says that he wansts to "amend the North American free Trade agreement" whereas John McCain thinks it better to continue free trade. The only optiion for the US is to hope that China will play rules of free ttrade. While this is ideal, the pres believes it will become difficult for China to hede such impreding laws. If you are the most powerful nation, after, don't you have a right to ben the rules? Common sense would sugest no but common sense is so relative these days that it's hard to say who has it. "One of the next president's biggest jobs will be striking a balance for the American people that maximizes the gains and minimizes the pain caused by the global economy. There is no easy answer, and closing our eyes to the changing world is not an option." All in all, the though of the U.S. loosing power is "mind-blowing, but not surprising." And, with the economy crashing, what is on the rise none other than gold? That's right. Keeping track of gold prices, I've noticed between the middle of June till now, it's been steadily climbing util it took a HUGE leap on July 11. Right now it is at $960 an ounce! Believe it it not, gold is more, yes MORE valuable than oil, coming in at an almost pathetic $145.66 an ounce on the New York Mercantile Exchange. so really, GO FOR THE GOLD!

The almighty dollar is mighty no more. It has been declining steadily for six years against other major currencies, undercutting its role as the leading international banking currency. The long slide is fanning inflation at home and playing a major role in the run-up of oil and gasoline prices everywhere.

Opinion: "Mighty no more?" Well, that's a given. To me, at least, it has been apparent that the Mighty dollar has been loosing its might for some time now, but I never knew for how long. Six years?! Well, it geta ya wondering what will happen to our currency, doesn't it?

Everything made in America - from goods to entire companies - is near dirt cheap to many foreigners. Meanwhile, American consumers, both those who travel and those who stay at home, are seeing big price increases in energy, food and imported goods. The dollar has lost roughly a quarter of its purchasing power against the currencies of major U.S. trading partners from its peak in 2002.

Opinion: Seriously? I've never been to Europe before, but knowing that makes me want to go all the more!

The loss of the dollar's purchasing power and international respect has some experts worrying that the euro might one day replace the dollar as the so-called primary reserve currency. And that could trigger a dollar rout as foreign governments and international investors flee from U.S. Treasury bonds and other dollar-denominated investments.

Opinion: I think it's on a matter of time before this happens. It's already happening!

This week, investors in New York says job managing is better-than-expected. Not considering financial aspect of the market sector, statistics show that growth is about 10% greater than last year. After investors took in the seesaw pattern of last week (today being July 27), they saw that more clarity was needed. Dow Jones fell 0.323% and NASDAQ rose 1.22%. Although this may be true, quite a few indexes are down 22% from their October high. Investors are saying that it could help consumers if oil keeps falling. It's final close out being $124 a barrel last Friday. The GDP rose 1% in the first quarter. The report on the GDP of the second product will be released on Thursday.

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Mikasi

at 09:54 on July 11th, 2008

I may b e incorrect here, but I believe that in the 1800's the world's two biggest economies were China and India. So this might be a return to traditional values.

Heiky

at 11:22 on July 11th, 2008

Yes, in the 1600s-1800s the world economies were dominated by China and India, although India's economy dies down after that while China's tinkered along until the mid 1800s.

MsMcReality

at 13:55 on July 12th, 2008

Oh yeah. I'm not saying the United States has been the largest power of all times. As a matter of fact, in the grand scheme of things, the United States has been the largest power since the turn of the 21st century.

Wilbur Fudd (not verified)

at 08:46 on July 28th, 2008

Are you saying the United States of America is just a 'pimple on the a** of time?'

zichi

at 11:41 on July 11th, 2008

The Chinese are now the second richest economy and one day not too far in the future its likely it will again become the richest economy. The reason so many American jobs were exported to China isn't to do with the Chinese, its to do with "American Companies" moving their production lines to China and still wanting Americans to buy the products. These companies are the real "anti-American!"

Paschen

at 21:06 on July 11th, 2008

good stuff:

MsMcReality, I like this story. It's good stuff.

I have always been saying it! Forget to learn English!

Learn Chinese, by the time you speak it, it will be the Worlds official languish!

Well North American may want to learn Spanish as well, since English seems to get over run in a hurry by Spanish in the Americas!

BigT

at 23:21 on July 11th, 2008

good stuff:

Just remember that China comes in second when using PPP (purchasing power parity) which supposedly levels countries based on what they can buy with the same dollar - i.e. a US dollar can buy a haircut for $10 but in India it would only cost $1 so this disparity is evened out. This type of measurement is best for non-traded goods on an international scale (you can export microchips but you cannot export haircuts). So, in my opinion, China gets a huge bump when using PPP that may not be totally accurate since a huge portion of their economy is based on international trade (like you rightly say, with us).

Now, when the nominal GDP numbers are used (which is just compensating for exchange rates, probably our dollar) China gets knocked down a notch or two. According to the IMF and World Bank China has the fourth largest GDP (behind us, Germany, and Japan). Their GDP is about 3.275 trillion dollars. Our GDP, by comparison, is about 13.8 trillion dollars. Using PPP our GDP stays the same and China's jumps to about 7 trillion dollars. It more than doubles.

And there are other things to consider as well such as the actual wealth of a nation, the per capita numbers, GNP (which measures the total output of all of a nations citizens instead of economic activity within a nation), and many other things.

For anyone who wants to learn a little about GDP you can click HERE. This is the Wikipedia page regarding GDP and if you scroll down you will find links to GDP lists (nominal, PPP, per capita, etc.).