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Credit Crisis: Catalyst That Changes Course Of History?

Time and again, history has witnessed the staggering rise, and shattering fall, of great civilizations.

For example, there’s 476 AD and the fall of the Roman Empire; 1945 and the demise of British colonialism.

And then there’s 2009, and the end of America's world dominance?

Eeek, we weren’t expecting that last one!

Once the leader in global commerce and controller of the globe’s currency of choice, the U.S. may now be sliding into second place.

In our scramble to avoid a deep depression, the federal government has generated quite a tab. In fact the bill totals a whopping $1.8 trillion; that's 13% of GDP.

And we’re paying for it with debt – by issuing Treasurys of all shapes and sizes.

All that borrowing has sent the dollar down 10% in the last 6 months. Meanwhile countries that didn't break the bank on bailouts such as France and Germany are already seeing a robust recovery.

Did America play it all wrong? Is this credit crisis that catalyst that changes the course of history? Carlos Gutierrez, former Commerce Secretary thinks it’s entirely possible. “Our deficit has increased by $800 billion, we’re talking about raising taxes and our trade is way down. Things have changed,” he says.

Don’t miss what else he tells Fast Money. Watch the video now!

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And this wouldn't be Fast Money without a trade. If Gutierrez is right, how should you play it?

You could short the dollar, explains Guy Adami, but if you do know that many people are already on this trade. And for what my opinion is worth, quite frankly, that trade terrifies me.

I'd play it be shorting the long-end of the Treasury curve, adds Karen Finerman.

If the dollar gets beaten up, commodities should spike, explains Joe Terranova. If you agree with Gutierrez take long positions in stocks that benefit from higher commodities prices.


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Trader disclosure: On Aug 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman's Firm Owns (BAC) Preferred Shares, Finerman Owns (BAC) Preferred Shares And (BAC); Finerman's Firm Owns (MSFT), (ARO), (WMT), (TGT); Finerman's Firm Is Short (USO); Finerman's Firm Owns (WFC) Preferred Shares And Is Short (WFC), Finerman Owns (WFC) Preferred Shares; Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Grasso Owns (ASTM), (BAC), (C), (COST), (PRST), (V), (WMT), (FAZ), (AAPL); Terranova Owns (FCX), (BTU), (SU), (WFT), (AMZN), (MSFT); Terranova Is Short (CCL), (ESS)

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