survived the loss of Empire, so perhaps the too will become a second-rate little socialist mess funded by .
How did you see its future 2, 5, 10 years ago?
I agree with that. Monumental pressure is being applied on China to bow to every US whim: right now she is being pressured to revalue the yuan, to approve sanctions on Iran and to join the cap and trade scheme. The US can probably armwrestle/cajole them into accepting a single one among these three. But US-China relationships will deteriorate even faster than now. War with Iran and skyrocketing Gulf oil prices would hurt both China and the EU the most but the EU poses no threat to the US. In fact the EU may even join the US in the foolish embargo against Iran despite the fact that Iran is a much better trading partner than Israel. And Iran doesn’t pester us with continuous requests of free stuff “because you killed Jews in the past”.
In the meantime the phony recovery will most likely go bust as capital investments grow thinner and thinner: lending money from the Fed at near 0% and using that money to buy US governments bonds yielding 3,5/4% will become a favorite of both banks and other financial institutions. Government spending will grow at an unprecedented pace as it will be seen as a necessary condition for GDP growth and to fight unemployment. I frankly believe government jobs won’t be enough to cover the severe bleeding of private sector jobs so we’ll probably see a net loss in the next years while GDP will grow at a tumultuous pace. Ron Paul will probably point this out a thousand times in the next two years but he’ll only reap scorn for being “a nutcase”. In the meantime Wall Street will desperately look for the next bubble to inflate since a stock market crash is bound to happen. Even when adjusted for inflation present stock values have completely lost touch with reality.
In the end the US will squander away their strength to prevent Baby Boomers and their sons from paying the price due of runaway monetary inflation, rampant speculation and mindless optimism: “no correction!” will become a rallying cry and no sacrifice will be spared to avoid the burst. In turn the US will lose what little respect they still have abroad: if war with Iran breaks out that respect will evaporate even faster. If Israel pulls another “Cast Lead” without the US and UN objecting in any meaningful way more respect will be lost. At that time more and more resources will be poured into propping up dangerous autocrats like Mubarak and useless puppets like Karzai: see, we have plenty of friends in the world! Everybody loves us!
But beyond this I see a large war as inevitable. While I consider Marc Faber a bit of a doomsayer I am with him on this. Right now you would expect the US to clash with China but many scenarios are possible: after all who would have thought in 1929 that the mighty French army, the finest in the world, would be soundly defeated by the defenseless Germans just eleven years later?