Over in Europe last week – actually, I was in various countries that happen to be on the European continent, but if they want to pretend there’s a meaningful entity called “Europe,” far be it for me to disagree – anyway, over in Europe, there was a lot of gloating about the shriveled state of the American dollar – a buck fifty to the Euro, two bucks twenty to the pound, etc – and a general agreement that this portended the start of a inevitable remorseless accelerating decline into oblivion for the Great Satan. My old Telegraph colleague, Ambrose Evans-Pritchard, puts the opposing argument here. Aside from all the economic stuff, I was interested to see him signing on to the Steynian demographic line:

At the end of the day, the U.S. remains the only major power still producing babies a rate high enough to survive through the 21st century as a dynamic society. China’s workforce will peak in 2015. The country will then tip over into the steepest demographic decline ever recorded. It will be old before it becomes rich, doomed to second-tier status.

As I often say, there’s no precedent for increasing prosperity on declining human capital. Dissenters then respond either that (a) losing a couple of hundred thousand from your traffic-choked city sounds rather agreeable or (b) such structural defects tend to be self-correcting. But, as Evans-Pritchard notes, elderly societies tend to be undynamic, and any demographic self-correction takes a couple of decades to work its way from the nursery to the workforce:

Germany, Italy and Spain are all going grey, succumbing to that status quo outlook that comes with age. Their economies may even start to contract. Yes, birth rates can rise, but only by cultural revolution, and with long lags.

UPDATE: A pedantic reader writes:

The GBP/USD exchange rate is not “two bucks twenty to the pound”, nor has it been at any point in the last 2 years. The highest it’s gotten recently is $2.11. Currently, it’s $2.06. You diminish your own credibility by getting something like this (which would takes an absolute minimum of effort to verify) incorrect.

He then encloses a link to a Yahoo exchange-rate page. And I say: oh, phooey. If you’re standing in a shopping square in Warwickshire, as I was a week ago, a Yahoo URL will avail you nought. The commercial exchange rate – in banks, stores, etc – was between $2.18 and $2.21.