Its NOT Japan, Its Argentina

What irritates me a lot these days is that many American commentators out there (probably the same people who said the economy was "strong" in 2007)are comparing the current situation in the US with that of Japan in the 90's. Sorry folks - ain't gonna happen. The US is in a whole lot worse position that Japan at the time. Argentina is more like it.

The strength (i.e., purchasing power) of the dollar since '71 is has been "artificial" - in the sense that it is not backed by the inherent strength, i.e., productive capacity of the US economy, but by oil. We only need look back to what happened to Argentina in the early 90's to see what this can do to an economy, which pegged its currency at par with the dollar at that time. This caused imports to get cheaper and decimated the domestic industry causing large scale unemployment and misery. Same thing has happened in the US, but it has been able to avoid massive unemployment (up until now, i.e.) by building a debt-based phony "service" economy. Formerly one of the richest countries in South America (and in the world, I think), the children in Argentina started dying of malnutrition; overnight, people's savings were cut in 1/4th due to devaluation of the currency, and many other such horrors. This is a documentary on YouTube regarding what happened in Argentina which I think will be instructive. Its a stark picture of what a financial crisis can do to the country. People think finance and economics is just some kind of academic wonderland that's irrelevant to them. Not so. It is the most integral part of your life - your survival depends on it.