Peter Drucker on the Upcoming Dollar Crisis (and Much More)

[On the Road]

Trading Places
by Peter F. Drucker

---snip

The next major economic crisis will most probably be a crisis of the U.S. dollar in the world economy. It will put to a severe test the oligopoly of the central banks of the developed countries that now rules over the world financial economy.

---snip

But a new kind of mercantilist rivalry is emerging in this new economy--one in which the United States suffers from little-noticed disadvantages. For instance, the EU is seeking to export its regulations (and to impose its high regulatory costs on the United States) through international agreements, the reinterpretation of WTO rules, and the growing acceptance of EU standards in third markets. It is also promoting its new currency, the euro, as a rival and alternative to the dollar as the world's reserve currency--a step that, if it succeeded, would greatly reduce the U.S. government's ability to attract foreign funds to finance its deficit and thus maintain the Bush Doctrine. Nor can the United States be certain of maintaining the solidarity of its own bloc in competition with the EU. Several Latin American states are going slow on the negotiations to extend NAFTA for political reasons. The EU is itself seeking closer trade and economic relationships with Latin America through partnership talks with MERCOSUR. And the recent trend of Latin American politics has been to drift away from "neo-liberalism" and towards a Left perennially tempted by anti-yanquí protectionism. What is different today is that the EU offers these political forces the ability to choose free trade while simultaneously resisting U.S. "hegemony." The United States could therefore find itself with a smaller "home market" than rival blocs, but with the same high-cost regulations, in a world of intense mercantilist competition.

For thirty years after World War II, the U.S. economy dominated practically without serious competition. For another twenty years it was clearly the world's foremost economy and especially the undisputed leader in technology and innovation. Though the United States today still dominates the world economy of information, it is only one major player in the three other world economies of money, multinationals and trade. And it is facing rivals that, either singly or in combination, could conceivably make America Number Two.

Link

God, I love this guy. Reading Peter Drucker's books on management is what persuaded me to go back to school and study business.

[CrispyQ]

1. Boosh has done a wonderful job of making

America Number Two.

:puke:


Thanks for the link.

[Vogon_Glory]

2. Interesting Article. Should Be Shared With Non-Progressives

Drucker's article is well worth reading, and certainly gives food for thought, whether you fully agree with him or not.

I think that we ought to share this article with our more pro-"bidness" friends. Even if they don't have much sympathy with the average prole or the struggling small manufacturer, the more thoughtful of them might be given some insights as to why the Boosh regime and its Banana Republican supporters are bad for America and for most Americans' economic interests.