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03/02/2010

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rks

Argentina couldn't print its way out of the mess, America can. This is a huge difference. America can press the reset button on the whole economy. When Germany did that in the early 1920s it then returned rapidly to fighting shape (literally). American's underestimate their natural advantages: huge natural resources, fertile land and lots of rain, people who expect to have to work hard, rule of law. However America needs lots of electrification (transport, heating, ...) and cheap electricity. You can't block coal AND nuclear power, and expect the electrification to save you from the demise of fluid fossil energy [and burning fluid fossil energy for electricity is insane].

Brad DeLong

rks has it right. If the dollar's status as world's reserve asset starts to crack, then we are in big trouble. Before that happens, we are not.

And there are absolutely no signs that that cracking is not at least two generations away. I know. I watch for them daily...

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