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so, if there is a serious dollar crisis, the switch might be quite brutal, because everybody will know where to go (the inertia is driven before anything by the need for common conventions and rules that are known to all and are reliable)

That's the point though, unless there are proactive measures, the collapse of the dollar is likely to be as you said brutal.  And because it has the power of inertia, any event that precipitates such a crisis of confidence to cause an exodus from the dollar will likely be dramatic, and rapid.  

And a rapid collapse of the dollar will create vaccuums that tax the ability of the euro to come in and provide stability.  So even if the euro is a viable alternative to the dollar in the long term, can it handle the shock of a crisis?  

And what happens when the US export market drys up, and suddenly all those products previously sent to the US have no place to go?  Can the Chinese economy survive that shock, or does it experience a rapid contraction?  And if China gets the flu, how many other states get pneumonia as a result?

I think that a transition is going to have to happen, it's a matter of how rapidly it occurs, and at what cost.  I think that even the Right realizes this, and they're preparing for that eventuality.  The Left has not.  And unfortunately, bad ideas that provide order trump no ideas at all.  

And that's a huge point that I'm trying to make.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sat Jul 14th, 2007 at 01:41:11 PM EST
[ Parent ]
I fully agree with that (both the fact that the transition is likely to be brutal precisely because it's a matter of coordination, and crowd perceitions, and that the right is in a strange way better prepared for it, despite refusing to entertain the notion), and you are indeed making a fundamental point.

We've quoted several times the BNP (British National Party) about peak oil and how thye are waiting for it as the trigger to move their ideas to a higher level of popularity.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (jeromeguillet@yahoo.fr) on Sat Jul 14th, 2007 at 06:08:02 PM EST
[ Parent ]
The left has its head up its arse. The US democratic party is a good example, but the European Social Democrats are not far behind.

Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Sat Jul 14th, 2007 at 06:15:55 PM EST
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