COVER STORY: THE ECONOMY: There Is a Silver Lining, By Fareed Zakaria, Newsweek, Oct 11, 2008

Nice piece by Fareed. For years in the old PNM brief, I did the bit about America "living large" (with sound clip of Mike Myers as Austin Powers screaming out, "Yeah! Baby, yeah!") and I'd make the requisite noise about needing to correct our overconsumption relative to population (focusing primarily on energy and money and environmental damage). I would never get much of a response on this, so after about 4 years, I yanked the slide, figuring the trend would continue until it could not continue anymore. I just got nowhere with that gentle hectoring. When you started reading about foreign powers considering the switch from dollars to euros, you could tell the end was approaching, as the market was finally offering a natural balancing mechanism beyond collusional efforts of Western great powers to center the dollar somewhere near its desired/real price (Plaza Accord 85 and "reverse Plaza" of 95). The good upshot? While we got overleveraged, we did provide the global economy with a lot of liquidity and demand when it truly needed it over the past 20 years. Now, that economy has simply grown beyond the capacity of relying on just the dollar as a reserve currency, like the West/US economy grew beyond the restriction of gold-backing in the early 1970s. So a good and necessary step, whose welcomed byproduct is reining in our spendthrift ways. Thus the need for many new allies...