Remember the footage in the “Inside Job” documentary of a single Chinese worker working in an otherwise empty giant factory? That factory could be productive, but the international currency system is preventing it.
That’s the irony. If all the world’s currencies collapse in one day, productive potential will be exactly the same as it was the day before, but production will fall idle all over the world because currency is the medium of exchange that facilitates production.
This is the main problem. If it’s not fixed it will become an even bigger problem; but it will still be the same problem. Fix the currency problem and production will be up and running again. Don’t fix it, and it will be The Day the Earth Stood Still (original version). And that day could drag into years if something isn’t done about it.
A credit crisis in China’s most enterprising city is making the country nervous: (article by Time Magazine)