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03/24/2008: "Democracy creates self-cannibalizing society"

For years, Americans have reveled in profligate, load-up-the-back-of-the-SUV-at-Target excess, much of it paid for by credit cards, home equity or other loans. The binge has produced some supposedly healthy economic growth and provided everyone lots of nice stuff. But now debt collectors from around the world are knocking. That's why today's turmoil in U.S. financial markets will end in a massive transfer of wealth from America to the rest of the globe.

One effect has been to depress the value of American assets, such as shares and property. This alone is impoverishing the average American. Housing price futures are predicting a more than 20% decline in Los Angeles home prices over the next 12 months. Christopher Wood of brokerage house CLSA recently wrote that the financial meltdown will "produce the most devastating wealth destruction" in the U.S., "which conventional monetary policy will be powerless to prevent." Americans are already getting poorer by the day.

As the financial crisis in the U.S. persists, the combination of decreasing asset prices and a weakening dollar will make the U.S. cheaper and cheaper to foreign investors. Irresistibly cheap. The U.S. is, after all, still a highly desirable place to own property, companies and securities. Foreign investors will see the crisis as a golden opportunity to buy prime pieces of Americana at bargain-basement prices. So all those dollars in banks around the world will flood back into the U.S. to buy stocks, bonds and property. Debt-burdened Americans, desperate for fresh cash, will be only too happy to sell — or be forced to sell. The U.S. will become one giant garage sale, where the buyers are Japanese banks, Chinese state-run investment funds and oil-rich Arab sheikdoms.

[ Oh stop. Americans are just enjoying their freedoms. Those freedoms destroy them, you say? What are you, a goddamn racist commie? ]

http://www.time.com/time/magazine/article/0,9171,1725094,00.html