[Munqi]

What would be the impact on rest of the world and especially Europe if the american economy were to crash?

[drgoodword]

[roccman]

What would be the impact on rest of the world and especially Europe if the american economy were to crash?

"if"..."were"...

I think not.

The amerikan enonomy is currently in a tail spin...that will result in a bone crushing thud for the world.

ITO who gets it worse...??

To understand the answer you must understand that the royal elite want to cull the world population by 90% or more...

No one gets it worse. We all die.

Can ya dig it?

[Ludi]

Worldwide depression. See "the Great Depression" for historical example.

[Munqi]

When this happens how long do you think it will take before companies start going bankcrupt in Europe?

[Ludi]

When this happens how long do you think it will take before companies start going bankcrupt in Europe?

Since so many companies are multinational, I'd expect it to happen almost immediately (weeks).

[Kingcoal]

Instead of expecting to wake up some day and hear that the economy has officially crashed (which would never be announced officially, by the way), look at it all like an extreme slow motion movie of an explosion played in reverse.

The US economy is crashing - in slow motion. It's way to big to suddenly crash, like some smaller countries. Rather, it is slowly imploding. The reason why it is happening in slow motion is that the US economy is everyone else's problem. Mr. Bill likes to use the expression; "our dollar, your problem," and that about sums it up. Most of the industrialized world profits in some way or another on the US economy and they don't want those markets go away. IMO, the US has done an excellent job of making it's economy everyone elses problem. Like the adage about owing the bank a billion and the bank having a problem, the world economy will have a big problem as Americans quit borrowing and buying.

It's all necessary, however. Conservation of resources will occur no other way.

[Micki]

I disagree with the whole world crashing scenario.
Take one example. China. When they decide to float Yuan it will strengthen multifold against US$. This will over night result in imports of all raw materials, energy etc. becoming much MUCH cheaper to them. They have 1.3Billion people who suddenly would get stronger purchasing power. They are set to become the new consumer nation.

This is obviously the reason why for instance Jim Rogers is telling his kids to learn Mandarin.

[Fishman]

A billion people starve. One of the few breadbaskets of the world, the greatest source of humanitarian aid, licks its wounds and stays home to take care of its own. War breaks out in several world sites, the mean old "world policeman" sits in his office and heals. Again, as in the past, the world calls out for us, but we can't respond.

[vilemerchant]

This will over night result in imports of all raw materials, energy etc. becoming much MUCH cheaper to them.

Are you sure? They're not buying raw materials and energy with Yuan, they're buying it with their stockpiled US$.

[BigTex]

The price of oil would fall along with consumption and peak oil and its effects would be mitigated.

Sort of like a "treatment is worse than the illness" scenario.

[hope_full]

A billion people starve. One of the few breadbaskets of the world, the greatest source of humanitarian aid, licks its wounds and stays home to take care of its own. War breaks out in several world sites, the mean old "world policeman" sits in his office and heals. Again, as in the past, the world calls out for us, but we can't respond.

This makes a lot of sense to me. There is still so much slack in our "international aid" budget and we haven't begun to retrench and/or protect our expenditures in this arena. The reason America grew so fast so quickly is because it is a land (well, it WAS a land) with abundant natural resources.

I still have hope that the US can support its 300 million residents in some fashion *if* we stop burning our food in the gas tank and *if* we stop shipping it overseas. And another thing - the US population growth is speeding toward ZPG. It's the OTHER guys (and girls) in the rest of the world that are procreating like mad.

[Micki]

This will over night result in imports of all raw materials, energy etc. becoming much MUCH cheaper to them.

Are you sure? They're not buying raw materials and energy with Yuan, they're buying it with their stockpiled US$.

That depends.... Either that US$ is worth much less or if they have been somewhat clever, they have tied up a lot of that money in long term contracts while it still had some value.

The important point is, if the US is going to crash and burn, China has a choice whether it will go down with US or decouple. Choice seems pretty simple to me.

[mmasters]

A few years ago the USA crashing would have set the whole world into a crash. A crash today would send the world into a depression. A crash a year or two from now will probably send the world into a recession/depression depending on where you are. When/If it happens you can bet the rest of the world will find other ways to make ends meet.

[copious.abundance]

What would be the impact on rest of the world and especially Europe if the american economy were to crash?

The price of oil would also crash.

[GeneralGreen]

I still have hope that the US can support its 300 million residents in some fashion *if* we stop burning our food in the gas tank and *if* we stop shipping it overseas. And another thing - the US population growth is speeding toward ZPG. It's the OTHER guys (and girls) in the rest of the world that are procreating like mad.

No! America will not be able to support these people. What youve seen for the past 50 years has been a byproduct of the oil age.
Just take a trip to a Wal Mart and ask yourself...will these and 300 million+ people survive an extreme depression? Then take a trip to a city..say Detroit and ask what will happen once government can no longer float the bill for these people.
Also the USA is being flooded by people South of the border..and expect as the recession -depression crash of Mexico economy happens..about 30-50 more million to flood in. I expect by 2020 the USA will have around 350 million people "50 million added from 2008-2020 mostly from Mexico, Asia, Africa and Arab nations.
hope_full- Thats a good name for you...because you do have allot of wishful thinking.
If the US economy crashes the world will follow..plain and simple...if the US stock market crashes so will the worlds.

[Munqi]

Now uh.... this might be a little dumb question but i have to ask.



Is this it? Will things ever get better once this happens or do you think we will see temporary improvements before things start going downhill?

If not, then.... wouldnt that mean that this is the fast crash that people talk about here? Or am i mixing something here?

[dorlomin]

Life is always vastly more complex and unexpected than almost anyone imagines. The system is not static, if there is a severe crash in the stock market and a series of sympathetic bankruptcies running through the global financial system due to outstanding CDS's and other interconectedness... the following morning when the world looked at itself it would have just short of half of the oil we will ever consume left, huge factories and an infrastructure that can continue to support billions of people for decades to come.

The easy imaginitive solution is Collapse----> Mad Max. That is one credible if in my opinion low probability outcome. The most likely outcome of a severe economic crisis from the fiancial sector would be (in my opinion) a rapid return to the thirties, chaos mixed with people trying to rebuild order, New Deals and National Socialism. Make work programs and make war plans. Protectionism and populism would dominate the politics of the era.

Out of the panic the nations of the world would largely rebuild along socialist lines. Work for all, just back breaking building of new railways and farms wheather you want to or not.

Id guess in these circumstances if you can grow your own food and make enough money from selling food or services you would not need to be handed a shovel to earn your bread.

History has many suprises for yet. I just have a rather uncomfortable feeling none of them are going to be overly pleasant.

[ROCKMAN]

dorlomin,

I agree with your characterzation of a possible future especially the complexity of a system that can't really be predicted. The world survived the global depression brought on the the late 70's oil spike. In fact, the oil price collapse of the mid 80's led to a great economic boom here. But we weren't knocking on PO's door in 1986 either. For me the future hinges on the race between demand destruction vs. PO production decline rate. And I don't think anyone can offer a credible expectation...just to many "what ifs".

[Snowrunner]

What would be the impact on rest of the world and especially Europe if the american economy were to crash?

The price of oil would also crash.

That's hopeful. Depending on how the value of the USD oil may just go the other direction.

Of course, should this happen, the question is how long others are willing to accept to get oil (and other commodities) listed in USD before they switch to an alternative Monetary system (Euro?).