To cut a very long story short, there is no political or economic solution to this financial crisis that is reasonably attainable in the next few decades.
I am quite sure that the world would eventually settle down to some agreement on an international reserve currency, international trade imbalance curbs, and re-balancing of wealth. However, looking at Japan’s last twenty years, looking at the Eurozone’s recent to-and-fro over preservation of the status quo, and looking at the fiasco that is American bipartisan deadlock, I do not think that this is likely to happen in any timeframe that is worth considering.
Despite this, I am very optimistic about the future within ten years. This is because I can see very clearly that some new technologies are debuting, and these will revolutionise things to such an extent that economic and political structures will have to follow and adapt, rather than lead and direct.
The current financial crisis will become irrelevant, or at least the solutions that are on the table.
The first and foremost of such technologies is 3d printing. With 3d printing, the entire supply chain will alter. Stocks will no longer be needed. Sub-assembly stock and shipping will disappear. New models and old models will be conflated – it will be possible to resurrect old designs at will. It will no longer be entirely necessary to upgrade for maintenance reasons. Flexibility will improve.
You will be able to find a broken latch, doorhandle, washing machine powder tray or door component, print it off and deliver it. It won’t matter (much) what it is made of, when it was first made, what country it came from, or if the original manufacturer is still in operation.
You will be able to go to hospital and print off new teeth, organic tissue with inbuilt blood vessels, new skin graft substrates.
You will be able to print a silver jewel in the design of your choice. You will be able to make a 3d chocolate in the shape of your loved one.
Printers will be at school, at home, and high-volume, high-tech ones will act as local manufacturing centers at towns and villages.
The result is that within 5 to 10 years China, Japan and others will suddenly and unexpectedly for most cease to be manufacturing exporters, and their economies will need to utterly change. Consequently the dollar cycle will end, and this will go down too.
Eventually, the 3d printing revolution will lead to open mass-produced invention . Hobbyist inventors will no longer need to rely on VC investment and the set up of entire supply chains (or the commissioning of existing ones) to get their ideas realised. New bearing designs, new solar thermal collectors, vertical wind turbines, boats, wave powered and wind powered gadgets, and whatever anyone might ever dream of, will be available with a CAD program, an internet connection, and access to print services.
Distributed, open, flexible manufacturing will become a reality.
Ultimately this will lead to new energy infrastructures, and the era of oil will end. Again, this will further hamper the USD as it is currently positioned. On the other hand, the oil producing nations of today are in many cases best positioned to become solar energy producing nations, and carbon capture for plastic synthesis nations.
All of this will occur in the next 10 years. The future is very bright, but not without some disturbing shocks.