American Cowboy

America's number 1 cowboy action-hero, George W. Bush, seems to be under the impression that America can pretty much do as it pleases. He seems to think that America can "..go it alone, if necessary..." with military adventurism wherever and whenever it wishes. He's fogettting one important fact though...America is a debtor nation.

Suppose, just for the sake of argument, that our foreign creditors failed to show up at US bond auctions to buy that debt? The possibility of this happening grows with each day the dollar continues to slide.

The fall in the dollar’s external value per se may not cause additional financing difficulties, but if this fall is symptomatic of a generalised withdrawal of foreign credit, then the whole underlying credit structure could fall apart, as it has done many times before in other financial crises. Given the size of the US, the global fall-out will obviously be substantially greater. - Marshall Auerback

Remeber the peso crisis in Mexico? Remember the economic collapse of Southeast Asia in the 90's? As speculators dump US treasury notes on favor of euro based notes, the dollars decline will accelerate leading to a decline in the US economy similar to that which occured in those emerging markets. Only, because of the size of the US markets, the global effects will be much worse...not to mention the effects here at home. This also provides an economic lever to influence US foreign policy, in case you haven't figured that out by now.

So, America's #1 cowboy action-hero needs to wake up and smell the coffee, before he smells the ashes of his pyhrric victory on November 2nd.