The Freefalling Dollar and Bush’s war on the Middle Class
By Mike Whitney
-- -- 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
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
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
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
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
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
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
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