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The United States is going down December 5, 2010

Posted by hslu in China, Economics, Energy, Global Affair, Islam, jobs, Politics.
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If you haven’t read Thomas Friedman’s Op-Ed piece, The Big American Leak, on New York Times, you should.

http://www.nytimes.com/2010/12/05/opinion/05friedman.html?_r=1&nl=todaysheadlines&emc=a212

The sad truth about the two American addictions Friedman talked about in his piece is that they can not be reversed no matter how hard American tries.

What Friedman failed to point out is that there are many other oil producing countries who hate America even more so than Saudi does. Iran and Venezuela are two prime examples while Russian and Iraq are not exactly America’s friends either.

Even worse, some of them tell the United States and the world that they are enemies of America. America may not import oil directly from these countries but the United States depends on them, as much as it does on the Saudis, to maintain their oil flows to avoid interruption of crude oil supply. If they decided to hold back their oil production a mere 10%,  for whatever reason that pleases them, the US will be paying $200+ a barrel to the Saudis now. And these countries also get paid at $200+ per barrel too.

Bill Clinton decided in 1993 to cooperate with China and he reckoned that the best way to deal with China was to convert China from communism to capitalism. He has succeeded more than he ever dreamed of.

The massive amount of FDI from the US and other countries since 1993 has allowed China to become the factories of the world, America included. With plants moving from the US to China, America has changed into a service-based economy and the aging of the 78 million baby boomers will make that even more so. America will continue to buy things from China or some foreign countries for the foreseeable future. In other words, the US will owe even more money to foreign countries as long as plants and jobs continue to leave the United States.

As for the dream mentioned by Friedman in his piece:

“If (the US) were in the process of converting to electric cars powered by nuclear, wind, domestic natural gas and solar power”

It will not happen simply because the United States is broke.

Period.

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