I've read a fair amount of chatter today about the Ambrose Evans-Pritchard piece in today's UK Telegraph. Entitled "World Power Swings Back To America," Evans-Pritchard outlines his arguments as to why the U.S. has left the precipice of economic disaster. You can read the piece and come up with your own conclusions, but I would submit the usually insightful Evans-Pritchard totally biffs this call for the following reasons:
- It's not that we're all that awesome right now; we just suck less than China and the EU. To E-P's credit, he does concede "the switch in advantage to the US is relative. It does not imply a healthy US recovery. The global depression will grind on as much of the Western world tightens fiscal policy and slowly purges debt, and as China deflates its credit bubble." (emphasis added)
- Chinese inflation is near the point of spontaneous combustion, and the EU is one or two bad decisions away from a credit crisis of ecumenical proportions. Think your way through this one, folks, because I'm not sure E-P has. If China can't continue to support buying and holding our debt, and if Europeans can no longer obtain credit to import U.S. made products, exactly how are we in the U.S. coming out on top?
- Cheaper energy, obtained here in the U.S. is great - provided others are able to buy the stuff we make using said cheaper energy. We live in a global economy. In the past, when one nation struggled, other nations rushed in with capital to take advantage of the lower asset valuations. We're clearly not in a position to do that for these other nations we are now supposedly leading out of the global crisis.
So, SDS Nation - what do you think? Do you believe the U.S. is back in the driver's seat? Or are we still facing economic malaise for some time to come?