Tuesday, November 06, 2007

Woe is We?

It seems every day brings with it more bad news about the U.S. dollar: Brazilian supermodel Gisele Bündchen recently refused payment in dollars while negotiating a deal, insisting instead that she be paid in euros. Last week, Jim Rogers, who is a former investor partner of business mogul George Soros, said he was selling his home and possessions so that he might buy beacoup amounts of the Chinese currency, the yuan (I guess he forgot that a huge majority of Chinese are still riven in poverty). Federal Reserve Notes are at unprecedentedly weak levels compared to the British pound and - dear God! - the Canadian dollar as well. Confidence is flagging, no two ways about it.

While there are very real, pertinent, unavoidably economic and political causes for the dollar's recent fall from grace, I can't help but wonder if all of the negative media publicity is only adding to the woes of Washington, Lincoln, Hamilton, Jackson, Grant and all those Benjamins. Despite all those videos circulating on the net demonstrating the perceived stupidity and/or ignorance of average Americans, the truth is most people around the world who watch or read the news unquestioningly and uncritically are just as stupid and ignorant as the common folk in good ole' Uncle Sam. Just because they won't admit to it doesn't make it not so.

You see, there are a lot of people out there who don't simply want to see the United States brought down a peg or two on the Power, Strength & Arrogance scale; they want to see America marginalized, and it isn't out of some altruistic buddy-buddyhood with the common man or woman in the Third World. They want their own countries on top. Go ahead, you can deny it, but listen closely to the words of Venezuela's Hugo Chavez, and witness his actions. Have a seat, as an American, with two proud French citizens criticizing our Republic, and if you're able to keep from feeling backed into a corner (it isn't easy, when they can talk so fast!) and think clearly, you'll see their bashing us in order to make their country sound better.

Of course, Americans do this all too often. I, myself, am guilty from time to time of criticizing certain countries with the motivation solely being to show how we're better than "they" are. Then again, there are those other times - and I like to think of them as being the majority of the time - when I harshly criticize or call out undemocratic, intolerant, gleefully violent nations and societies because I feel that what their governments do is wrong, because I'm disgusted by what I see happening, and because I know to my core that our claim on the moral high ground is greater than theirs could ever be in their current governmental and cultural manifestations.

What does this have to do with the dollar? Am I not, even now, simply defending the dollar because I'm feeling threatened on its behalf? Yes and no. A lack of confidence in the dollar isn't simply a lack of confidence in the monetary power of the United States of America; it represents a lack of confidence in pretty much everything about America aside from, maybe, our entertainment offerings. And to say that President Bush is solely to blame would be to forget the dismal approval ratings of the Democrat-controlled Congress. All too easily, however, ordinary "everyday" Americans will go out, will watch the news, and believe what their told about the dollar's slide without actually thinking hard about it.

I guess what I'm saying is, I'm going to remain optimistic about the dollar's future prospects. I know, thanks to my independent, casual research and reading, that getting excited about the rise of the Chinese and Indian economies is grossly premature (people are "utopianly" excited about what they think will happen ten or twenty years down the line, forgetting the very real obstacles and challenges facing both countries). I don't mind, really, whether the Canadian dollar is either still at a parity with the American dollar or is actually at a higher rate of exchange now. That means, probably, that more Canadians will take shopping trips down to the U.S. to take advantage of the state of things in the States.

Besides, nothing is permanent. In the wake of the Second World War, both Britain and the European continent were largely in ruins: incredibly and, some thought, fatally (in the face of expected Soviet expansion efforts) financially vulnerable. Today, thanks in part to the help given in the past by the U.S. to Europe in the form of more than generous Marshall Plan, the European Union has a strong currency union, and both the euro and the pound are, as we are continually being reminded each day, consistently blowing the U.S. dollar out of the water.

French president Nicolas Sarkozy, writing in his book "Testimony" (I really enjoyed it) before he was elected to serve in the Elysee Palace, stated repeatedly that "nothing is inevitable." He meant, of course, that the destiny/fate of his country's economy, society, etc. was not solely up to uncontrollable influences. Throughout his campaign, and since his election, he's mentioned the need for France to adopt a serious change in attitude.

We would be wise, ourselves, to take this advice as our own when thinking about the State of our Union today, financially, politically and culturally. Our uncommon optimism about the future has long been a hallmark of the United States; there have been times, of course, when it seemed that tomorrow
wouldn't or even couldn't be a better day than today...e.g., the Great Depression. Overall, though, we've been blessed to be able to have hope in the promise of tomorrow, the possibilities that - with a little hard work, and steadfastness - are within our reach.

Paying full mind to realities of the moment, we can nonetheless fundamentally reject the fatalistic pessimism about the future prospects of the U.S. dollar, and do our own small part to help it out of it's rut. In the meantime, I have no problem with Canadians, Britons, and Continental Europeans (among others) flying to America to go on holiday shopping spending sprees (much like they did last year) with currencies momentarily stronger than ours. I say let them help U.S. businesses big and small all they want. You might be embarrassed, but hey - they're doing our economy a favor!

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