Niall Ferguson: US empire in decline, on collision course with China

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“The US is an empire in decline, according to Niall Ferguson, Harvard professor and author of The Ascent of Money,” reported Aaron Task of Yahoo Finance – Tech Ticker.

“People have predicted the end of America in the past and been wrong,” Ferguson concedes. “But let’s face it: If you’re trying to borrow $9 trillion to save your financial system …and already half your public debt held by foreigners, it’s not really the conduct of rising empires, is it? Excessive debt is usually a predictor of subsequent trouble.”

The report highlights Ferguson as saying America today is comparable to Britain circa 1900: a dominant empire underestimating the rise of a new power. In Britain’s case back then it was Germany; in America’s case today, it’s China.

“When China’s economy is equal in size to that of the U.S., which could come as early as 2027 … it means China becomes not only a major economic competitor – it’s that already, it then becomes a diplomatic competitor and a military competitor,” Ferguson said.

Source: Aaron Task, Yahoo Finance – Tech Ticker, October 20, 2009.

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2 comments to Niall Ferguson: US empire in decline, on collision course with China

  • Brian Jones

    Niall is right. The empires of the past (Roman, Spanish, British, etc) have all been wealth gathering machines together with a dominant military. You can’t be an economic basket case and a dominant empire at the same time.

    Getting into a military face-off with its largest creditor, and the country with the power to destroy the US$ will be an interesting experience for the US.

  • This week should be very interesting. On Wednesday the GDP number comes out which should signal that we’re out of the recession. I wouldn’t be surprised however, if that triggers a sell-off, especially if the number is 3.5% or less. Buy the rumor, sell the news. I think we’ve topped for now. I believe there’s enough skepticism in the way we’ve escaped this recession to shake the market a little bit. Quantitative Easing, dollar crashing to make exports stronger against imports, massive gov spending. None of this is healthy GDP in my opinion – but it will be counted. Just beware.

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