As the last depression began to unfold following the 1929 stock market crash, which was the onset of the 3rd Long Wave winter, the U.S. was the world’s largest creditor nation. Nevertheless, the bursting of the credit bubble at that time took down the U.S. banking system. Ten thousand U.S. banks failed between 1929 and 1933 and following his inauguration in March 1932, President Roosevelt declared a bank holiday and all banks were closed for four days. As the depression worsened and since America was self-sufficient in both food and energy, the country turned inward in order to focus on its most pressing issues. Emerging from the depression in 1949, the U.S. swiftly became the most powerful nation in the world and still the largest creditor nation with a GDP of about half the world’s total.
Today, we are experiencing the 4th Long Wave winter. The U.S. is now the world’s largest debtor nation and China enjoys the status of the world’s largest creditor nation. Like the U.S. of the 1930s, it is likely that given the huge debt bubble now prevalent in China, it will be the Chinese banking system that will collapse when that debt bubble bursts. Unlike the U.S. of the 1930s, China is neither self-sufficient in food, nor in energy. Moreover, the country suffers from dire water problems. As the worldwide winter depression unfolds, contrary to the U.S. of the 1930s, but like Japan at that time, China is likely to aggressively seek out more natural resources and focus her citizens’ attention away from the country’s domestic economic problems.
When the winter depression comes to an end, perhaps initiated by a war, similar to World War II, China should emerge as the most powerful nation in the world with her currency receiving international acknowledgment as the reserve currency, much as the U.S. dollar was accorded that status at Bretton Woods in 1944.
Cycles of world leadership last approximately 100 years.
The U.S. century as world leader is drawing to a close, with China likely to assume that mantle.
It saddens me to agree with your assessment of the precarious position the US now faces. One can point to the late stages of the Roman EMpire when money was debased along with the culture within the larger urban centers in particular Rome itself. There must be an iron law that governs the stages of cultural rising and falling and the US appears in the grip of the later.
Whatever happened to PC Gold?