From the Information Clearing House:
The Freefalling Dollar and Bush’s war on the Middle Class
By Mike Whitney
"Information Clearing House"
The dollar is getting hammered almost daily now. It’s like watching the blood ooze from a hemophiliac. In just one month the dollar has tumbled from $1.20 to $1.29 vs. the euro; an astonishing 7% retreat.
Can’t the American people see what is happening to their future?
In just 6 years Bush has taken the world’s strongest currency and chopped it into finally ground hash. By the time people rouse from their stupor, the greenback will be eye to eye with the peso. Bush has piled up more debt than all the other presidents combined. His tax cuts have fattened the bankrolls of his constituents but they’ve put the dollar on a downward slide. Since he took office the once-mighty greenback has plummeted a whopping 35%.
Meanwhile, at the Federal Reserve, new Fed-master Bernacke has the printing presses running at warp-speed. The soaring price of oil has soaked up more than a trillion dollars of freshly-minted fiat currency, but it’s the only thing that's kept the greenback from slipping beneath the waves. Unfortunately, that trick won’t last forever.
Now that Bernacke is hinting that interest hikes may slow down or stop entirely, central banks across the world are stealthily off-loading their dollar-stockpiles. The twin-deficits ($400 billion account deficit and $800 billion trade deficit) have finally come home to roost and are pushing the dollar to new lows.
Dick Cheney’s foolish axiom, “Deficits don’t matter” has turned into a funereal-dirge for the greenback. Deficits Do matter, and bankers around the world are proving that by hastily moving away from Uncle Sam’s washed-out script.
On Thursday the congress added another $70 billion to Washington’s mountain of debt, completely ignoring the fact that the dollar lost a full 2% against the euro in the same 24 hour period. Is it possible to be that obtuse? Is anyone minding the store? The blinkered congress keeps writing bad checks on an overdrawn account and then patting themselves on the back for a hard day’s work. It’s incredible.
What foreign country wants to be yoked to a currency that is underwritten by $8.4 trillion in debt and freefalling by the day? The currency markets are as jittery as anyone can ever remember. The European Central Bank (ECB) and Japan are not prepared to take over as the world’s reserve currency, but they are equally reticent to keep shoring up the flaccid dollar.
What they’d like to see is the Bush administration demonstrate that they can still be a responsible steward of the global economic system, a role the US has managed since World War 2.
Don’t expect maturity from this crowd. Bush is simply carrying out a crackpot plan from his globalist friends at the Council on Foreign Relations (CFR) It is a strategy that Washington has executed many times via its surrogates in the World Bank and IMF. Corrupt politicians (Bush and co) plunge the nation into unsustainable debt, interest rates rise, the economy implodes, and the banks and corporations pick the carcass clean; privatizing what they can while destroying what's left of the social safety net. (John Perkins “Diary of an Economic Hit Man” provides a first rate account of how this method has been used repeatedly throughout Latin America)
In fact, it is simply the corporate version of traditional colonialism. The American public is too blind to see that the trap has now been set for them and that soon they'll be tottering off to the grocery store with wheelbarrows of cash for a loaf of bread and a head of lettuce. The dollar-slaughter is the biggest part of this whacko scheme. It is the quickest way to crush the middle class by robbing them of their life-savings through hyper-inflation.
We often refer to Tom Friedman in this column as the unofficial spokesman for the Council on Foreign Relations. The CFR is an amalgam of American elites from all professions who are committed to the creation of a “global government”. When Friedman preaches his “Flat-earth” theory of economics from his perch at the New York Times, he’s really offering his vision of what America will look like after labor laws and trade protections have been removed and workers are forced to compete head-on with the poorest paid workers in China or Guatemala.
The falling dollar will trigger this scenario sooner than we think.
This view of unfettered capitalism is the Holy Grail of “free market” globalists. In fact, they invariably refer to it as “democracy”. It portends a world where industry overlords dictate policy to their political underlings and where society is entirely shaped to enhance corporate profits.
For the avatars of predatory capitalism, Friedman’s Flat-world is a “dreamscape”; the capitalist Valhalla. For the struggling middle class, it is a return to the law of the jungle; the fast-track to widespread destitution.
By collapsing the dollar, Bush can shift the wealth of the American middle class to corporate mandarins in the blink of an eye. Industry profits will soar while working class people drown in an ocean of red ink. The wheezing housing bubble and the steadily rising interest rates are a warning sign that time is running out on the dollar.
America is being readied for economic “shock therapy” and “structural readjustment”, the vile remedies for ailing economies. When the bottom drops out, the snoozing American middle class will finally stir from their slumber and get their first look at the new world.