America Set To Lose "Financial Superpower Status”

September 26. 2008

A sobering reminder of the state of the U.S. economy came via German finance minister, Peer Steinbrück, who stated America is on track to lose its, “Financial superpower status.” If a proper financial intervention is not staged, his words will prove correct. America is at a terrible crossroads, where serious, concise and informed decisions need to be made, to salvage the nation’s economy and redirect its future.

Germany joins the chorus of nations such as Britain, China and much of the countries in Europe, in designating much of the blame for this crisis on lack of regulation in the U.S. financial system. I’ve stated the same for almost 2 years on this site and the Sound Off Column. Contrary to what certain big wigs in Congress state, regulation and oversight is not socialism.

America has oversight and regulation in other areas, such as the law, the U.S. Code, which states one is not to murder, assault, batter or steal, among other things. Corporate America needs a set of legal guidelines, written into law, stating they are not to transgress certain bounds and trample American citizens finances, extracting far more than they are entitled to for goods and services.

Mortgage companies need to be reined in, prohibiting them from issuing loans with steep interest rates with no cap on it. Credit card companies need to be reined in, limiting their ability to charge such unreasonable interest rates, it virtually guarantees a lifetime of financial servitude. There are people in America with credit cards that bear a 37% interest rate. That’s ridiculous.

The price of gas is too high. However, some in Congress are beholden to gas companies and basically let them do what they want. They’ve made enough money off the nation, it’s time to cap how much they can squeeze out of America’s collective wallet. They are not doing this at cost, clearing record profits in these hard times, meaning they can take a small pay cut and extend some savings to the consumer at the pump.

The American dream of homeownership, car ownership, a robust financial life and sending one’s children to university has never been so out of reach. It’s been undercut and abused by corruption.

STORY SOURCE

US ‘will lose financial superpower status’

The US will lose its role as a global financial “superpower” in the wake of the financial crisis, Peer Steinbrück, German finance minister, forecast on Thursday in the most outspoken comments by a senior European government figure since Wall Street plunged into chaos two weeks ago.

Mr Steinbrück, a Social Democrat and long-time champion of tougher financial market rules, said the US government was to blame for the severity of the crisis because it had resisted European calls for stricter regulation until it was too late.

“The US will lose its status as the superpower of the world financial system” with the emergence of stronger, better-capitalised centres in Asia and Europe, he told the German parliament. “The world will never be the same again.”…

“Ten years from now,” he later told journalists, “we will see 2008 as a fundamental rupture. I am not saying the dollar will lose its reserve currency status, but it will become relative.”

The minister said it had been “irresponsible” of the US government to oppose stricter regulation even after the subprime crisis had broken out. This laisser faire ideology, he said, “was as simplistic as it was dangerous ... This largely under-regulated system is collapsing today.”

http://www.ft.com