06 May 2012 The Economies of The United States, China and Europe

Economic systems of these the three largest financial regions will see the greatest effects.

The United States owe massive amounts of money to China. Faced with dwindling receipts, the
debt will be kept current by creating money. When growth stops and the United States economy
shrinks, the ability to purchase goods and services will naturally diminish for each dollar. As
debts are paid with more printed money, lending will stop. China will have less and less ability
to purchase with US dollars but this situation will become moot as the ability to ship goods
offshore will be halted. China, addicted to supplying the world, will undergo radical economic
transformation. Most manufacturing will stop, as most of it involves export goods.

As China halts exports, refuses to buy US debt and becomes economically isolated once again,
the United States will stop servicing its own debt. As the debt to China is ignored, the value of
US Treasury securities will plummet in general. All attempts to print money will further erode
confidence.

Europes debt, already unmanageable for several nations, will have a similar effect across the
European Union. Nations with greatest perceived ability to withstand the financial onslaught
will abandon the eurozone, revert to prior currencies and stand-alone monetary policy. The
European Union will break up and cease to exist. These steps will do little more than delay the
onset of permanent economic change.

Unlike its central government, the states of the USA cannot print currency or make monetary
policy. As the central governments ability to grapple with the financial downturn proves
insufficient, pressure will come to bear on bankrupt states. Faced with mounting debt and
declining revenue, many will default on state bonds. Not only will this kill the lending and
borrowing but will also cause the states far from this position to reconsider their role. The 40+%
of spending that is borrowed by the USAs federal government is not spread evenly; some states
get little or none of it and not even the equivalent of taxes levied by the central government
comes back in services and benefits. Other states get a far higher % than their population bears
to the national total.

Faced with a share of the national debt from which it received no benefit, such states will bitterly
resent continued tax payments perceived to be destined for a bottomless black hole. There will
be pressure for some to secede and this will occur, likely where abundant natural resources
allow temporary economic isolation. The condition will pass quickly as other states lacking
certain urgent production will barter, if necessary, with the newly independent territory. Central
government reaction will be predictable but any pressure placed on a remaining state
attempting to barter this way will be seen as hostile.

Against the backdrop of financial shifts, this will be less devastating than it might first appear.
National pride will be injured, to be sure, however little practical damage will be done. The
seceding state(s) will see a benefit from such a move.

Trade barriers will be temporarily erected between former European Union nations but these
will crumble. As most trade between Europe, the USA and China will cease, little effect will be
felt in the one region from what befalls another. International currency trading will all but halt,
as relative values of one to the other will become risky and difficult to establish. As trade will
drop off, the need for currency trading will fade anyway.

As trade drops between nations and becomes a memory, so will the vast majority of workers in
the trade & logistics business. International finance will be curtailed as a result.