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For many years, most of the general population of the United States has had a domestic focus and perspective. We are surprised, and to some extent hurt, when other nations do not go along with our view of the world. Whether our international policies are right or wrong is not the point of this column; it is the fact that we no more control global development than we control the Internet.
Take money matters. Americans traditionally look at the U.S. dollar as the basis for all other currencies. The traditional media reinforces that perspective; when we watch the Today Show or even the nightly news, we are rarely reminded of how our currency is valued in the world. What we do hear is that major commodities such as gold, silver, and most important of all, crude oil are all priced in our familiar greenbacks.
Our perspective is quite unusual in the world. As someone who has lived a major part of his life abroad (and traveled significantly), I can report that most of the world is quite well informed on how their currency and domestic output fit into the rest of the global economy. Local news carries regular updates of foreign currency exchange rates. Businessmen understand that investment in goods will fluctuate in accordance with the value of their currency.
Few probably understand how much of our financial strength rests on our dollar serving as a reserve currency for so many countries and as a benchmark for so many goods. Further, beyond bombastic political speeches of jobs going overseas, it’s unlikely most Americans realize how much we depend on imported goods. As our purchasing power wanes, the country sleeps blissfully unaware of the risks of an eroding currency.
The current situation of the weak dollar may mark a lasting shift in global economic realities. Recently, it was suggested in some foreign circles that crude oil be redenominated into Euros. You can imagine how this would delight many of our overseas detractors. It would be a devastating setback to our business environment and would mark the beginning of the end of our dominance in global financial markets. Without substantial foreign holdings of dollars and investment in the United States, our small (and large) businesses will find cheap and easy credit harder to obtain. Starved of its easy credit monetary fuel, the engine of American entrepreneurialism will shudder to a halt.
Take money matters. Americans traditionally look at the U.S. dollar as the basis for all other currencies. The traditional media reinforces that perspective; when we watch the Today Show or even the nightly news, we are rarely reminded of how our currency is valued in the world. What we do hear is that major commodities such as gold, silver, and most important of all, crude oil are all priced in our familiar greenbacks.
Our perspective is quite unusual in the world. As someone who has lived a major part of his life abroad (and traveled significantly), I can report that most of the world is quite well informed on how their currency and domestic output fit into the rest of the global economy. Local news carries regular updates of foreign currency exchange rates. Businessmen understand that investment in goods will fluctuate in accordance with the value of their currency.
Few probably understand how much of our financial strength rests on our dollar serving as a reserve currency for so many countries and as a benchmark for so many goods. Further, beyond bombastic political speeches of jobs going overseas, it’s unlikely most Americans realize how much we depend on imported goods. As our purchasing power wanes, the country sleeps blissfully unaware of the risks of an eroding currency.
The current situation of the weak dollar may mark a lasting shift in global economic realities. Recently, it was suggested in some foreign circles that crude oil be redenominated into Euros. You can imagine how this would delight many of our overseas detractors. It would be a devastating setback to our business environment and would mark the beginning of the end of our dominance in global financial markets. Without substantial foreign holdings of dollars and investment in the United States, our small (and large) businesses will find cheap and easy credit harder to obtain. Starved of its easy credit monetary fuel, the engine of American entrepreneurialism will shudder to a halt.
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