Economics: Is the US positioning its big businesses for a buying spree?

Let's look at the facts.

1. Oil is phenomenally expensive. Currently trading at just shy of USD100, the only reason there is not an oil-price driven economic crisis is because the US dollar is so weak against all major (and many not so major) currencies.

2. The USD is very weak against all major (and many not so major) currencies. In recent days, it has recovered some small ground against some of those currencies in particular the euro, pound and yen. Even so, a 25% shift in favour of the dollar would not make it as strong as it often has been in recent years.

3. The USA is in the grip of a crisis borne of bad lending decisions. However, the assets underpinning that lending are not worthless, they are just worth less than the lenders imagined. However, there is a huge crisis of confidence. Further, the US has had both house and general inflation plus demands for increased health care provision and many families are struggling to meet their debt repayments. Incredibly, it seems, they would rather lose their houses than their cars, as default on mortgages is running higher than default on personal loans.

4. The US economy is predicated not on earnings but on borrowings: for at least 30 years, spending future income for today's pleasures has been an American way of life. Now that credit is more difficult to get, spending falls.

5. Credit is not difficult to get for large companies with strong balance sheets and growing "revenues" (the US seems to place far too little reliance on profit as a measure of ability to repay, seeing turnover as the measure of the success or otherwise of a company. Prudence would say that a company with 20 employees making USD1 million profit on a turnover of USD3 million each year should be a better credit risk than one with 20,000 employees, turning over USD500 million but making a USD50 million loss. That rarely seems to be the decision making process for US lenders.)

If we join those up, where does it leave us?

1. The US has large oil stocks. It can weather a three month shortage with little difficulty. Other countries do not. Therefore, the price of oil acts to the competitive advantage of the US at present.

2. The US can bring the dollar back to, say, parity with the Euro any time it likes. To strengthen it rapidly would cause shocks in markets that do not have oil stocks and which are either tied to the dollar or which are dollarised - such as China.

3. The rapid fall in share prices across the world happened when the US markets were closed. Usually, it is movements on Wall Street that trigger rapid swings around the rest of the world. So who was selling? Answer - according to sources in the region US based funds were leading the charge to dump shares across South East Asia, and that led to contagion in Europe yesterday.

A rapid appreciation of the USD will make those shares that are now falling even cheaper for US companies.

Who's got the money? Answer - the banks, and the funds.

So here's our theory: a concerted government, business and funds attack on Asia Pacific and European businesses can be mounted on the cheap so long as those with the money are ready.

And they usually are.