I'm reading a book right now - Biography of the Dollar. The book was published in 2008 and it's interesting how the last 2 years have changed perceptions and situations.
An interesting excerpt: "The United States is not capable of balancing its budget... It allows itself to have enormous debts. Since the dollar is the reference currency everywhere, it can use others to suffer the effects of its poor management. It exports its inflation all over the world. This is not acceptable. This cannot last."
This was said by French President Charles de Gaulle in the 1960s. Eerie right?
40 odd years and things have just deteriorated on the global currency argument. Another interesting point is the massive debts that some European countries were able to accumulate (partly) due to the wider spread of the Euro.
Going back to the excerpt; this was in the late 1960s and finally resulted in the breaking of the Bretton Woods agreement and the de-linking of the dollar and gold. Back then, gold was at #35 an ounce - it's currently at around $1365 an ounce.
What the world has allowed is an exacerbation of a problem into something that has become the norm... it's OK to have budget deficits and it's OK to spend more than we can afford.
It's amazing how we have assumed that all businesses will keep growing and how we completely believe that another depression is inconceivable.
Let's learn and keep ourselves secure shall we?