Doomsday for the dollar may in fact not have arrived. But arrive it will as time runs out on the pact that the US made with the devil – enjoy yourself as much as you can, have your every wish granted for, the punishment will be in the future. As 16th century playwright Marlowe put it:
“Ah, Faustus, now hast thou but one bare hour to live and then thou must be damned perpetually.
Stand still you ever moving spheres of heaven that time may cease and midnight never come”.
Midnight is at hand for the $800 billion a year US current account deficit which has been financing not just the US consumption binge and the Iraq war but the global asset price bubble which is affecting, to varying degrees, assets around the world and of every variety.
So what does this mean for an Asia which has been the silent partner in the Faustian bargain, acquiring most of those excess US dollars in return for the ability to sell unlimited amounts of sneakers, toys and laptops to Americans?Read on if you've got the stomach for it, but be warned: it's terrifying stuff. Consider the author's investment advice: "avoid the dollar like the plague."