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17 February 2009

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If you want the debate full in the face, go to Calculated Risk (a real estate blog, often quoted by Krugman), and click on the Comments after any given post.

My business, a mom & pop mail order bookstore, is down by half since this time last year. It is currently far below break-even. My American customers have been hit with the economic downturn. My international customers have been hammered by that, as well as a worsening exchange rate.

Well, heck, I could see the US disaster coming years ago. Which is why I tried so hard with the international customers, who, only a few months ago, made up more than 50% of my gross. (Yes! I am, or was, one of the few people actually bringing money into the country, albeit only a tiny amount.)

I figured, no matter how bad the US economy got, surely the many Chancellors of the Exchequer around the world would see to it that their people would not suffer. I might lose my American markets, but when the dollar collapsed, I would clean up internationally. So I thought. I was wrong.

Economies around the world stumbled and to my horror, the result was a run on the dollar.

The Euro is on the verge of collapse. If the Italians or Spanish or Germans (or Irish) don't do it in, the upcoming collapse of Eastern Europe will. If you want that story, read Eurowatch, by Edward Hugh, a British economist based in Barcelona.

Last night there was a wild rumor that someone in Asia was dumping local currencies & buying dollars.

In a week or two or three will come a tax revolt unlike anything we've ever seen. Maybe that will shake Washington awake.

How long will it last? (Make it a contest. Winner gets a lifetime supply of pies.) I'm not cheerful, but I was born that way. I don't expect to see last year's money again in my lifetime.

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