What's Going On

This piece from George Soros is worth reading. The key line:

The current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the US and the rise of China and other countries in the developing world.

This quote reminds me of an interview with Jim Rogers that I was watching the other day on YouTube. In the interview, Rogers was explaining why he wanted his daughter to grow up in Asia. "Being in Asia today is like being in New York in 1908 or London in 1808," he said. It's the place where the future resides.

Of course, that future isn't quite here yet, and those who have argued that the rest of the world has already decoupled from the American economy have been proven woefully wrong in the past few days. But they aren't wrong on principle; they are simply premature.

As Soros puts it, "The current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency." But that end, it should be noted, is less punctuation than seque. Such transitional periods don't conform nicely to prognostications based upon the past; nobody alive has ever lived in a world in which the dollar wasn't dominant. But we'll all be living in such a world soon enough.