....and a whole lot more, but that is for a different post.
Bloomberg:
The dollar's 41 percent drop against the euro during Bush's term writes the economic epitaph of an administration that set out to restore American preeminence. Instead, Bush heads to Japan next week for his final international summit with diminished leverage as Russian and Chinese influence grows." The ultimate disgrace for a Republican: Bush wrecked the dollar. 7/4
The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.
Showing posts with label American Dollar. Show all posts
Showing posts with label American Dollar. Show all posts
Wednesday, July 2, 2008
Friday, June 20, 2008
Moran Stanley Warns Of catastrophic Event
Soon.................
(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)
The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.
Morgan Stanley Warns Of 'Catastrophic Event' As ECB Fights Federal Reserve
The clash between the European Central Bank and the US Federal Reserve over monetary strategy is causing serious strains in the global financial system and could lead to a replay of Europe's exchange rate crisis in the 1990s, a team of bankers has warned. "We see striking similarities between the transatlantic tensions that built up in the early 1990s and those that are accumulating again today. The outcome of the 1992 deadlock was a major currency crisis and a recession in Europe," said a report by Morgan Stanley's European experts. Just as then, Washington has slashed rates to bail out the banks and prevent an economic hard-landing, while Frankfurt has stuck to its hawkish line - ignoring angry protests from politicians and squeals of pain from Europe's export industry.
Indeed, the ECB has let the de facto interest rate - Euribor - rise by over 100 basis points since the credit crisis began. Just as then, the dollar has plummeted far enough to cause worldwide alarm. In August 1992 it fell to 1.35 against the Deutsche Mark: this time it has fallen even further to the equivalent of 1.25. It is potentially worse for Europe this time because the yen and yuan have also fallen to near record lows. So has sterling.
Indeed, the ECB has let the de facto interest rate - Euribor - rise by over 100 basis points since the credit crisis began. Just as then, the dollar has plummeted far enough to cause worldwide alarm. In August 1992 it fell to 1.35 against the Deutsche Mark: this time it has fallen even further to the equivalent of 1.25. It is potentially worse for Europe this time because the yen and yuan have also fallen to near record lows. So has sterling.
(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)
The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.
Thursday, November 15, 2007
Are Americans, In Large Part, Ignorant of The coming Economic collapse?
Because that is exactly what's going to happen if the American dollar and economy are not rescued by nations that are not exactly our friends. The only reason they would come to our rescue is if a collapse of the Americans dollar would harm their own economies enough to make it worth their while.
Even if China and others decide to come to our rescue, it won't be until the American economy is hit hard enough to lower American living standards for generations to come.
(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)
The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.
Even if China and others decide to come to our rescue, it won't be until the American economy is hit hard enough to lower American living standards for generations to come.
Hamish Mcrae: These are perilous days for the US
Published: 14 November 2007
I don't think Americans get it. I don't think they realise quite how serious the collapse of the dollar is for the global economy, nor the long-term consequences of this decline for the position of the US in the world. Sure, they grumble about prices in London and find it odd that US lawyers want to be transferred to the UK because they can earn more money here. But at a fundamental level, to judge by the conversations I have had in recent weeks, I don't think the US financial community appreciates quite what peril it is in.
There have been periods of dollar weakness before. The most notable marked the end of the fixed exchange rate system in the early 1970s. There have been periods of excessive dollar strength too, one of which led to the Plaza Accord in 1985 – so called because the agreement by the US and other major economies that the dollar needed to be capped was reached in the Plaza Hotel in New York.
Now it may be that in another five years the dollar will be strong again and Britons who used this age of the pound above $2 to buy property in the US will feel rather smug. Maybe. At some level, the dollar will become good value again and while currencies do overshoot their true long-term values, they do bounce back.
But there seems to be at least half a dozen reasons why what is happening now to the dollar is very serious indeed.
Most obviously, the present fall is going further than previous declines. The most marked collapse is against the euro but if you measure even against sterling, a rate of $2.10 cannot be justified by the relative purchasing power of the two currencies. It may not happen, but you hear talk in the City that the rate may go to $2.40, which would be back to the old dollar/sterling rate under the fixed exchange rate system. The greater the decline, the greater the disruption to the world economy.
Why such a large fall? That leads to the second feature that distinguishes this bout of weakness: the US current account deficit is much larger both in absolute terms and as a percentage of GDP than in previous dollar cycles. Every year, the US has to borrow around 6 per cent of its GDP just to pay for its imports. Until a few months ago it was able to do so. Foreign investors were impressed by the sales pitch they got from the US banking community: buy these sophisticated financial instruments our brilliant maths experts have created and you will get a higher return than you can get from anywhere else. Now those US bankers don't look so smart and more than one non-US investor has indicated to me they felt they have been stuffed with rubbish. They won't trust those bankers again.
So, the third new element: trust in US financial sophistication has been shattered. The problem is not just the dollar; it is the integrity of US financial institutions. The pitch that the US has more transparent and more resilient markets than other countries is no longer credible.
The fourth element is that there are other places to invest. I was at a Middle East fund management conference last month and everyone wanted to talk about opportunities in Asia. This year, for the first time ever, China is adding more demand to the world economy than the US. It is still a smaller economy and will be for another 20 years at least. But the direction is clear, with China set to pass Germany to become the world's third largest economy some time next year. India is also extremely attractive to Middle Eastern investors, thanks in part to the physical proximity of the sub-continent and the cultural links between the two regions. Anyone who invested in India five years ago will have done wonderfully well, far better than they would have done had they invested in the US.
Connected with this, point five, is the deterioration in the cultural relationship between the US and the rest of the world in the past few years. The US no longer appears quite the safe haven for investments that it used to, for a variety of reasons. One has been resistance in Congress to foreign takeovers. Another has been the change in visa requirements – why invest in the US if it is awkward to visit your investment? Can you really trust the US legal system to be dispassionate in a dispute between a foreigner and a national? At a low enough price, US assets will still be attractive, but they do carry a handicap and will continue to do so.
Finally, and this is perhaps the most important thing, there are now alternatives to the dollar. There is the euro, of course, and foreign central banks are building up their reserves in euros. The pound is now being held much more widely in central banks too. Most important, there are a basket of other currencies, including the Chinese yuan, which international investors feel they should hold. A decade or more ago, the options were much narrower.
So what is going to happen? Well, it is true that a very weak dollar creates problems for other countries as well as the US. It is not just that any non-American investor will have seen a large fall in the value of their investment; any foreign company trying to sell into the US or compete against US exporters will find it harder to do so.
That does not mean that US companies will always win. It was interesting that Airbus managed to secure a huge order this week from Emirates, against Boeing's more established competitor. But a weaker dollar does create problems for the rest of us.
The problems for the US, though, will be more serious, for it needs to import, amongst other commodities, half its oil. The high dollar oil price is already increasing inflation elsewhere – here in the UK for example – but the burden on the US is relatively worse. The more the dollar weakens, the greater the difficulty the US Federal Reserve will have cutting interest rates, for to do so would make the dollar weaker still.
We may just muddle through with the dollar falling for some months more, the US going into recession, the rest of the world pulled along mainly by demand from China and from the rest of Asia, and then eventually the dollar and the US recovering.
I am not too worried about the UK economy, though things are clearly slowing here. What we have to recognise is that there is such a thing as a global economic cycle. Some sort of downturn, maybe not too serious a one, in the next couple of years does seem inevitable.
There may need to be, however, an international rescue of the dollar. The world's central banks, including, crucially, the Bank of China, would come together and agree a package of measures to support it.
Were that to happen, it would be a mark of the way economic power is shifting in the world. It is slowly and inexorably shifting away from the US and that will, to many Americans, come as a shock.
h.mcrae@independent.co.uk
(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)
The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.
Friday, September 28, 2007
Ahmadinejad and Chavez Meet To Plan The Death of the Dollar
among other economic horrors.
It's been a slow but steady decline over decades. Gore Vidal puts a specific date on it, wrapping up our fiscal weakness with the passage of the National Security Act of 1947 [NSC-68]; then implemented in January 1950. The National Security Council was created by Public Law 80-253, approved July 26, 1947, as part of a general reorganization of the US. national security apparatus. The function of the NSC as outlined in the 1947 act was to advise the President on integration of domestic, foreign, and military policies relating to national security and to facilitate interagency cooperation. At the President's direction, the NSC could also assess and appraise risks to US national security, consider policies, and then report or make recommendations to the President.
In his retirement President Truman denied any responsibility for "cloak and dagger operations" but it was during his Presidency that covert intelligence operations in support of foreign policy objectives was undertaken on an ever broadening scale. The NSC's first action (NSC 1/1) authorized covert action in the Italian elections. The formal institutionalization of covert actions was established as NSC 4 in December 1947, and NSC 10/2 of June 1948.
Thus began three trends that have sealed our fate --our eventual bankruptcy as a result of empire, perpetual war ala Orwell, and --the unkindest cut of all --Democratic sell outs to the GOP! The result is the "auctioning off" of the office of President of the United States, an eventuality embodied in Mussolini's term: corporatism.
Something similar occurred on March 28th, 193 AD, when the Praetorian guards, literally, sold the Roman empire to the wealthy senator Didius Julianus for the bargain price of 6250 drachmas. I haven't tried to buy drachmas (lately) but it sounds like a bargain compared to the absurdly high prices that are paid by US corporations for control of the US Presidency, indeed, the US government. Our modern day "Didius" has fared better than Julianus.
If Gibbon is correct, it is an indication that Rome, by that time in decline, had suffered a catastrophic devaluation of its coinage. Even now "real" money is considered by some to be "gold" if anything at all has intrinsic value. That Didius Julianus would pay in Greek currency, not Roman, indicates to me that the smart money had already dumped the as, the asses, and the sestertius for drachmas. At last, bronze would seem to have little intrinsic value as "real" money unless you had enough of it to melt down for public statuary. I would wager that only very wealthy Roman aristocracy possessed denarius, which they might have held against the complete collapse of bronze coins.
Here's where everything begins to hit us where we live. Gibbon is remembered not only because he wrote a comprehensive nine volume history of the Roman Empire, he ventured a thesis: the Roman Empire, he claims, fell to barbarian invasions because of "a loss of civic virtue". The citizenry had become lazy. The empire had taken up the habit of "outsourcing" to barbarian mercenaries the more odious jobs, primarily the defense of the empire itself. By the time the Emperor Valens faced the "barbarians" at Adrianople, it is probably true that none of his some 40,000 legionaries were, properly, citizens of Rome. They were, perhaps, the 379 AD version of Blackwater, composed largely of Syrians and "barbarian" troops from Gaul. [I can't resist a trivia diversion. Gibbon, who devoted his life to his history of Rome, left London to complete his work in a less hectic environment: Lausanne on Lac Leman, otherwise known as Lake Geneva.]
As St. Thomas More said, our "business" now lies in escaping. He actually felt it his duty. But, alas, More was beheaded for his efforts. I still have hopes that we fare better but the road ahead is daunting. More understood how, in his own time, a privileged elite exploited the economic misfortunes of others.
The rest of the world may come to our aid when Bush is securely out of office but mere regime change will mean little. I see no stomach in either party for the reforms that might stay the hand of economic fate. As long as Bush is President, there is little upside for Europe, China, or Japan to continue shoring up a collapsing dollar.
France bailed out our failing "Revolution" --not because they loved us, but because the separation of American colonies from the British Empire was in their interests. The arrogance of American regimes and this one in particular does not help our case today. In revolutionary times, Benjamin Franklin charmed the French who adopted the "coonskin" hat and made of it the fashion statement du jour. Bush is no Franklin. In Europe, he is a cockroach, une blatte.
Bush misrule has taken its toll. Recently, in Europe, I watched a BBC documentary about happiness and the nature of governments in those nations whose people are most happy. The conclusion: happy people are more numerous in Democratic countries which respect privacy, civil liberties, and individual rights --freedom of speech and religion. People also tend to be happier in wealthier nations though wealth, in and of itself, does not correlate precisely with individual happiness.
The war on terrorism was lost when Bush became a terrorist. Bush has, thus, attacked the very source of our "happiness" --our nation's wealth, our privacy, our civil liberties and rights, our sense of security. It is difficult to be happy with the knowledge that one's own government has made of itself your enemy, militating openly against your interests and those of your neighbors.
Still, I urge everyone to make an existentialist choice. Choose to be happy in spite of Bush. It will drive him even nuttier than he already is. I suggest Victor Frankl's "Man Search for Meaning". Frankl knows what he writes about, having survived a Nazi death camp. The least we can do is survive George W. Bush.
(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)
The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.
Chavez and Ahmadinejad Pow-wow Amid Fears of US 'Economic Armageddon'
One is tempted to conclude that Chavez and Ahmadinejad are meeting to plan the death of the US dollar. Certainly, an oil bourse trading in Euros, might do the trick. Both men at the head of countries that still produce significant amounts of oil may have this power.
It is no coincidence that most recent dollar falls have occurred during the regime of George W. Bush, who walks a tight rope by keeping the dollar low but not collapsed. That, instead of building up a real economy, is how Bush floats his bubble upon the backs of US poor, US elderly and people in developing nations all over the world
Otherwise, the jobless rate would be even worse and Bush's failed regime would be seen for what it is: a house of cards. Chavez and Ahmadinejad have the power to collapse the house or break the bank. They have the power to expose the fraud Bush perpetrates at home and abroad.
Bush must surely be haunted by Iranian threats --not nuclear but monetary. I will leave it to economists to predict what might happen to the US economy if Iran should follow through with plans to establish an oil bourse trading in Euros, not dollars.
Ahmadinejad has Bush by the cajones. Unless Bush is prepared to utterly wipe out Iran, there is really very little Bush can do about it. Just this morning Ahmadinejad is in Venezuela for talks with Hugo Chavez. Both men have defied US imperialism. Both men lead oil producing countries. Both men detest Bush. Both men have a common interest --trading oil in currency other than the US dollar. If Bush were a responsible and legitimate President, the prospects might keep him awake at night.
It was about a year ago, as you may recall, that Hugo Chavez stirred the UN General Assembly and the world, calling Bush "the Devil". Bush had been there, Chavez said at the time. You could still smell the sulphur. These days its not sulphur but dollars going up in smoke as US currency continues its long slide into oblivion.
Current geopolitical tensions between the United States and Iran extend beyond the publicly stated concerns regarding Iran's nuclear intentions, and likely include a proposed Iranian "petroEuro " system for oil trade. Similar to the Iraq war, military operations against Iran relate to the macroeconomics of 'petrodollar recycling' and the un-publicized but real challenge to US dollar supremacy from the Euro as an alternative oil transaction currency.Coppes is no crank. He's chief economicst for Morgan-Stanley and predicted a 90% chance of a US "economic armageddon".
It is now obvious the invasion of Iraq had less to do with any threat from Saddam's long-gone WMD program and certainly less to do to do with fighting International terrorism than it has to do with gaining strategic control over Iraq's hydrocarbon reserves and in doing so maintain the US dollar as the monopoly currency for the critical international oil market. Throughout 2004 information provided by former administration insiders revealed the Bush/Cheney administration entered into office with the intention of toppling Saddam.[1][2] Candidly stated, 'Operation Iraqi Freedom' was a war designed to install a pro-US government in Iraq, establish multiple US military bases before the onset of global Peak Oil, and to reconvert Iraq back to petrodollars while hoping to thwart further OPEC momentum towards the Euro as an alternative oil transaction currency
It's been a slow but steady decline over decades. Gore Vidal puts a specific date on it, wrapping up our fiscal weakness with the passage of the National Security Act of 1947 [NSC-68]; then implemented in January 1950. The National Security Council was created by Public Law 80-253, approved July 26, 1947, as part of a general reorganization of the US. national security apparatus. The function of the NSC as outlined in the 1947 act was to advise the President on integration of domestic, foreign, and military policies relating to national security and to facilitate interagency cooperation. At the President's direction, the NSC could also assess and appraise risks to US national security, consider policies, and then report or make recommendations to the President.
In his retirement President Truman denied any responsibility for "cloak and dagger operations" but it was during his Presidency that covert intelligence operations in support of foreign policy objectives was undertaken on an ever broadening scale. The NSC's first action (NSC 1/1) authorized covert action in the Italian elections. The formal institutionalization of covert actions was established as NSC 4 in December 1947, and NSC 10/2 of June 1948.
I was asked to speak tonight about the National Security Act of 1947, which was enacted sixty years ago to the day. On a personal and professional level, it’s extremely significant to me—it created the two organizations I currently represent: the Air Force and CIA. Today is a double anniversary, so I’ve been invited to a lot more celebrations than usual.It was with the passage of this act, Vidal says, that the US began a regime of strict "governmental control of our economy coupled with the gradual erosion of our liberties" and all in the interest of "national security". Truman, in Vidal's view, thus sold us out upon the urging of GOP Senator Arthur Vandenburg, GOP, who "...told Truman that if he really wanted all those weapons and all those high taxes to pay for them, he had better 'scare the hell out of the American people."
Thus began three trends that have sealed our fate --our eventual bankruptcy as a result of empire, perpetual war ala Orwell, and --the unkindest cut of all --Democratic sell outs to the GOP! The result is the "auctioning off" of the office of President of the United States, an eventuality embodied in Mussolini's term: corporatism.
Something similar occurred on March 28th, 193 AD, when the Praetorian guards, literally, sold the Roman empire to the wealthy senator Didius Julianus for the bargain price of 6250 drachmas. I haven't tried to buy drachmas (lately) but it sounds like a bargain compared to the absurdly high prices that are paid by US corporations for control of the US Presidency, indeed, the US government. Our modern day "Didius" has fared better than Julianus.
A magnificent feast was prepared by his order, and he amused himself until a very late hour, with dice, and the performances of Pylades, a celebrated dancer. Yet it was observed that after the crowd of flatterers dispersed, and left him to darkness, solitude, and terrible reflection, he passed a sleepless night; revolving most probably in his mind his own rash folly, the fate of his virtuous predecessor, and the doubtful and dangerous tenure of an empire, which had not been acquired by merit, but purchased by money.An important point must be made here. Gibbon reports that Julianus paid for the Roman Empire in "drachmas". "Drachmas" denotes Greek currency. At that time, the basic unit of currency in Ancient Rome was a bronze coin called an as or aes. A sestertius, another bronze coin, was worth four asses. A silver coin, the denarius, was worth 16 asses. [I will not go there!]- Gibbon, The Decline and Fall of the Roman Empire; See also: Edward Gibbon: General Observations on the Fall of the Roman Empire in the West
If Gibbon is correct, it is an indication that Rome, by that time in decline, had suffered a catastrophic devaluation of its coinage. Even now "real" money is considered by some to be "gold" if anything at all has intrinsic value. That Didius Julianus would pay in Greek currency, not Roman, indicates to me that the smart money had already dumped the as, the asses, and the sestertius for drachmas. At last, bronze would seem to have little intrinsic value as "real" money unless you had enough of it to melt down for public statuary. I would wager that only very wealthy Roman aristocracy possessed denarius, which they might have held against the complete collapse of bronze coins.
Here's where everything begins to hit us where we live. Gibbon is remembered not only because he wrote a comprehensive nine volume history of the Roman Empire, he ventured a thesis: the Roman Empire, he claims, fell to barbarian invasions because of "a loss of civic virtue". The citizenry had become lazy. The empire had taken up the habit of "outsourcing" to barbarian mercenaries the more odious jobs, primarily the defense of the empire itself. By the time the Emperor Valens faced the "barbarians" at Adrianople, it is probably true that none of his some 40,000 legionaries were, properly, citizens of Rome. They were, perhaps, the 379 AD version of Blackwater, composed largely of Syrians and "barbarian" troops from Gaul. [I can't resist a trivia diversion. Gibbon, who devoted his life to his history of Rome, left London to complete his work in a less hectic environment: Lausanne on Lac Leman, otherwise known as Lake Geneva.]
As St. Thomas More said, our "business" now lies in escaping. He actually felt it his duty. But, alas, More was beheaded for his efforts. I still have hopes that we fare better but the road ahead is daunting. More understood how, in his own time, a privileged elite exploited the economic misfortunes of others.
The rich men not only by private fraud, but also by common laws, do every day pluck and snatch away from the poor some part of their daily living. So whereas it seemed before unjust to recompense with unkindness their pains that have been beneficial to the public weal, now they have to this their wrong and unjust dealing given the name of justice, yea, and that by force of law. Therefore when I consider and weigh in my mind all these commonwealths, which nowadays anywhere do flourish, so God help me, I can perceive nothing but a certain conspiracy of rich men procuring their own commodities under the name and title of the commonwealth.Bush having screwed the world, the "world" seems conspicuously less inclined to come to America's aid.--Sir Thomas More, Utopia
The rest of the world may come to our aid when Bush is securely out of office but mere regime change will mean little. I see no stomach in either party for the reforms that might stay the hand of economic fate. As long as Bush is President, there is little upside for Europe, China, or Japan to continue shoring up a collapsing dollar.
France bailed out our failing "Revolution" --not because they loved us, but because the separation of American colonies from the British Empire was in their interests. The arrogance of American regimes and this one in particular does not help our case today. In revolutionary times, Benjamin Franklin charmed the French who adopted the "coonskin" hat and made of it the fashion statement du jour. Bush is no Franklin. In Europe, he is a cockroach, une blatte.
Bush misrule has taken its toll. Recently, in Europe, I watched a BBC documentary about happiness and the nature of governments in those nations whose people are most happy. The conclusion: happy people are more numerous in Democratic countries which respect privacy, civil liberties, and individual rights --freedom of speech and religion. People also tend to be happier in wealthier nations though wealth, in and of itself, does not correlate precisely with individual happiness.
The war on terrorism was lost when Bush became a terrorist. Bush has, thus, attacked the very source of our "happiness" --our nation's wealth, our privacy, our civil liberties and rights, our sense of security. It is difficult to be happy with the knowledge that one's own government has made of itself your enemy, militating openly against your interests and those of your neighbors.
Still, I urge everyone to make an existentialist choice. Choose to be happy in spite of Bush. It will drive him even nuttier than he already is. I suggest Victor Frankl's "Man Search for Meaning". Frankl knows what he writes about, having survived a Nazi death camp. The least we can do is survive George W. Bush.
(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)
The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.
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