by Mike Whitney
October 23, 2009
from
InformationClearinghouse
Website
|
Note
Title was taken
from a comments line on a previous article from Dmark |
The "dollar debate" on the Internet has been
ferocious and emotionally-charged, but sadly lacking in logic.
To oppose the
"dollar will crash" theorists is like arguing a woman's right to choose with
the fist-waving throng assembled outside an abortion clinic. The results are
equally disappointing.
To say that "minds are already made up and the
issue is settled", is an understatement. For many, the dollar's transition
from the world's reserve currency to a
Wiemar
era Deutschemark is not a question "if" but only of "when".
One reader summed up the distrust that's felt
for anyone who dares to challenge the prevailing dogma like this:
"Mike... Your article on October 19th 2009
titled 'The Dollar will NOT crash,' made all of us in this part of the
world who respected your views and opinions feel disturbed and
appalled... Then my friend explicated and reminded me,
'From the time of Chaim Weizmann’s solicitous and guile behavior towards the politicians,
the media and the newspersons, the powerful Zionists lobby had perfected
the art of falsity and misrepresentation.'"
Uh, okay. So, now opposing the dominant theory
not only proves that one is a fool, but also a tool of the "Zionist
lobby"?
This is why struggling writers always keep the refrigerator stocked with a
hearty malt.
No one can deny that the dollar COULD crash or that it faces stiff headwinds
in the years ahead as the fiscal deficits continue to pile up. But let's not
overreact. Japan's deficits are twice the size of GDP and bond yields are
still hovering below 2 percent.
In other words, the Japanese are fighting
deflation, so no one is particularly worried about inflation. That's as it
should be.
In the US, deficits are a paltry 12 percent of
GDP, and already people have their knickers-in-a-twist. Even deficits soar
above 100 percent ($14 trillion) it's unlikely that they'll crush the
dollar. But - on the other hand - if the government suddenly stops spending
money and running huge deficits; unemployment will skyrocket, banks and
businesses will default, foreclosures will rise, and the economy will slip
back into a very severe recession.
The myth that "You can't solve a debt problem
by creating more debt" is pure bunkum.
That's for people who want to balance the budget
at all costs, regardless of its effect on working people. The goal should be
to get the economy back on its feet and worry about the red ink later.
Here's Paul Krugman explaining why
the
Fed is engineering a weaker dollar:
"Although there has been a lot of
doom-saying about the falling dollar, that decline is actually both
natural and desirable. America needs a weaker dollar to help reduce its
trade deficit, and it’s getting that weaker dollar as nervous investors,
who flocked into the presumed safety of U.S. debt at the peak of the
crisis, have started putting their money to work elsewhere.
But China has been keeping its currency pegged to the dollar - which
means that a country with a huge trade surplus and a rapidly recovering
economy, a country whose currency should be rising in value, is in
effect engineering a large devaluation instead.
And that’s a particularly bad thing to do at a time when the world
economy remains deeply depressed due to inadequate overall demand."
(Paul Krugman, "The Chinese Disconnect"
New York Times)
So, if China is so worried about their massive
investment in dollars, (as everyone seems to think) then why aren't they
letting their currency rise so the dollar can weaken?
It's because they are more concerned about
sustaining demand than problems with the greenback. They're showing they
have more confidence in the dollar than most Americans.
It is true that the dollar has dipped 15 percent since summer, but so what?
That just means that people are less scared now then they were after Lehman
Bros. collapsed.
Here's a clip from the Economist
explaining it all:
"The simplest explanation for the currency’s
decline is based on risk aversion. On the days when risky assets fall,
the dollar tends to go up. When risky assets rise, the dollar falls. The
dollar has fallen fairly steadily since March, a period which has seen
stock-markets enjoy a phenomenal rally.
Domestic American investors may be driving
the relationship, repatriating funds in 2008 when they were nervous
about the state of financial markets and sending the money abroad again
this summer because of a perception that the global economy is
reviving."
("Down with the Dollar" The economist,
Oct, 2009)
As time goes by, the relationship between stocks
and the dollar will change, but for now, the rule is still holds.
So why is this debate about the dollar so important?
Because the majority of people believe that the real problem is the
deficits, and not the economy. That's just flat wrong, and it creates
political opposition to more stimulus, which we need. Blame it on the media
for convincing people that we are in a recovery and that "green shoots" are
sprouting up everywhere. It's pure fiction.
The country could still wind up in a Depression
when the stimulus wears off. And it's wearing off very quickly. (The effects
of the stimulus will peak in the Third Quarter)
Consumer credit is contracting at a year-over-year rate of 5 percent.
Household balance sheets are in tatters, savings are up, spending is down,
and unemployment is headed for 10 percent. Record foreclosures,
delinquencies, bankruptcies, and defaults are sucking credit from the system
making it harder for the Fed to keep the economy sputtering along. If the
Fed cuts off the blood-flow of monetary stimulus, the patient will slip into
a deep coma.
Here's a likely scenario of what could take place in the next few months:
Even though the signs of severe deflation
are visible everywhere, investors short the greenback and the dollar
plunges to $1.60 per Euro. That increases public angst which sets off a
firestorm on Capital Hill. The Congress forces the Fed to stop its
quantitative easing (QE) program (which has already pumped over $1
trillion into US Treasuries and mortgage-backed securities) and
long-term interest rates spike overnight.
This puts downward pressure on the housing
market and the slump deepens.
More jobs are lost, more banks and financial
institutions default, perfectly good businesses cannot role over their
debt and call it quits, prices fall across the board, the stock market
retraces its March lows, and the economy ends up in the ditch.
Think it can't happen?
Bernanke's problem, is that all the tools at his
disposal are blunt instruments. It's like performing kidney surgery with a
meat cleaver. Dropping interest rates and printing money can stave off
deflation, but it also pushes stocks higher than anyone really wants. That
leaves traders on the sidelines waiting for a market correction before they
jump back in.
The same is true of the dollar.
Sure, Bernanke wants a cheap greenback to
spark exports and reduce household debt, but when the dollar plunges to
$1.60 per Euro, then the sh** hits the fan and the public outcry forces him
to change directions. If the dollar falls any further, the Fed will have to
shut down the printing presses altogether and watch while the boat capsizes.
The problem is more political than economic.
US policymakers should drop this nonsense about the dollar and deal with
the underlying problem itself; lack of demand. That means the
focus should be on wage growth and full employment. If that means printing
up a couple more trillion; then get to it!
Getting people back to work and paying them
decently should be job one.
Rothschild & Obama Demands...
Pay in Euros!
by Henk Ruyssenaars
Foreign correspondent
October 24, 2009
from
APFN1 Website
Part 1
"HERE'S A LIKELY SCENARIO OF WHAT COULD TAKE PLACE IN THE NEXT FEW MONTHS"
by Henk Ruyssenaars
Moniker MattL wrote this - and with Obama as the
next selected 'front man' it's the same:
"I just love how Bush bails out these greedy
banks who got themselves into the situation in the first place. I have
worked in the banking industry and I'll tell you what led to the
collapse, unbridled greed. It's never enough for them. They can be
making billions in profit and they still want more, more, more. They are
never satisfied with a healthy profit, it's never enough.
They are always trying to tweak things to make more money, usually at
the expense of the customer and the employee. They are evil. And why
don't I get a bailout if I take my savings and make a bad investment in
the stock market. They take OUR taxpayer bailout money and then raise
OUR credit card rates to 29% out of the blue when we've been paying our
bills on time for years, never missing a payment. Something is seriously
wrong here." - [end quote]
Government report questions rescue claims
And many now are convinced that there's
something - like with so many others - seriously wrong with author Mike
Whitney, who seems to have lost his coordination, who's maybe got a gun to
his head too? Whitney wrote an article on the Information Clearing House
site, which defended himself, and the strange course he has taken lately.
The article was
as shown above.
MY COMMENT IN THIS CASE WAS LIKE THIS:
To quote The Economist to back up one's own argumentation is not done:
"The
publication belongs to The Economist Group, half of which is owned by the
Financial Times, a subsidiary of Pearson PLC.
[Started by
Samuel Pearson]
A group of independent shareholders, including many members of the staff and
the Rothschild banking family of England, owns the rest." - [end excerpt]
Source: Wikipedia (Yes, I know who the owners are) - Url.:
http://en.wikipedia.org/wiki/The_Economist
THE NEW YORK TIMES, KRUGMAN AND THE 'NOBEL PRIZE ECONOMICS
And the other quote of this 'alibi columnist' Krugman from this propaganda
sheet The New York Times, is bad as well. Just because it fits the story?
Paul Krugman is the media 'front man' whose criticism of the Bush and now
Obama administration for his managers is used as an alibi: See how critical
we are! And filling the rest of the rag with propaganda.
"Alibi
Journalism & Why I Threw the Shoe."
The Jewish Telegraph Agency wrote last year:
"By JTA Staff · October 13,
2008:
Paul Krugman, a columnist for The New York
Times, won the Nobel Prize for economics."
http://www.cemab.be/print.php?id=1971
JTA got it wrong again: There is no 'Nobel Prize in Economics'
at all! It's
a prize which the Wallenberg bank leaders in Sweden give to their brethren
in the faith, to make them look better and - they hope - with a lot of
drumbeat by their media - more respectable.
The same as with the Nobel Peace
Prizes (in Oslo, Norway) for #1 warmongers and criminals like
Henry
Kissinger,
Al Gore and
Obama/Soetoro. Or what's his name. But the country of
Sweden as such, is also a part of the global corporation, and the Wallenberg
gnomes and golems (Google) are just franchisers of the mighty money mafia.
Sweden: not only Sex, Sin & Smörgåsbord
NYT: ON BEHALF OF THE WARRIORS AND WAR FINANCING PROFITEERS
The New York Times (Judy Miller anybody?) is rotten to the core, and as
flexible as a frozen fundamentalist.
And after the Afghanistan and Iraq
quagmire, the NYTimes started years ago as one of the leading propagandists
in the media, and on behalf of the warriors and war financing profiteers, to
urge another illegal invasion and attack on Iran, for the gnomes. Armed
conflicts are profitable in many ways and for many profiteers.
http://quebec.indymedia.org/en/node/23058
As if the millions of dead and suffering people in those countries aren't
enough to satisfy the power and profit mafia. The word 'enough' for those
greedy gnomes of Basel, Switzerland, apparently doesn't exist at all. And
for those who don't know the Princeton university's definition of gnome: "A
legendary creature resembling a tiny old man; lives in the depths of the
earth and guards buried treasure." The worst thing is: they - who take part
in the global and deadly swindle - they know all this!
(Your
future money: Amero or Eurodollar in Gold?)
Like
Rothschild et al, at the corporation's global 'department of finances'
the BIS, the 'Bank for International Settlements' in Basel, Switzerland,
which Krugman (like Whitney) hardly ever writes about.
(http://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q="Henk+Ruyssenaars"++BIS)
CIA/MOSSAD 'INSIDE JOB' OF 9/11 2001 FOR INSTANCE
Whitney and also Krugman for instance, have never asked for an independent
and really thorough investigation of the drama and CIA/Mossad 'inside job'
of 9/11 2001 for instance.
Personally, and I'm really not the only one, I think reality is this way, as
Darryl Robert Schoon describes it in this excerpt:
"Because money controls
politicians and bankers control money, bankers now control entire nations
through their control of the money supply; and, of all the banks, Goldman
Sachs has the most control and influence in the US. Economics is not rocket
science, neither is political science-and neither, in fact, is a science."
Power in capitalist economies can best be understood when viewed as a
franchise, a franchise which Goldman Sachs has been granted in America.
Just
as top Pentagon officials are routinely hired by US defense contractors for
all the obvious reasons, Goldman Sachs and other Wall Street firms enjoy a
revolving door policy regarding bankers who shuttle between Wall Street and
Washington DC, ensuring that one filthy hand washes the other: "Hey, look,
ma, no soap."
Robert Rubin, Timothy Geithner, Lawrence Summers, Alan Greenspan, Stephen
Friedman, Henry Paulson, Stephen Rattner, etc. are names that often arise in
regards to the lucrative relationships forged in the sewer, i.e. the
corridors of power, between Washington DC and Wall Street.
Lawrence Summers, now Obama's top economic advisor, was paid $135,000 by
Goldman Sachs for a one day visit in April 2008. This is how payoffs are
made. Of course, Wall Street and Washington DC are quick to remind us that
such payoffs are legal. Of course they are.
All laws are legal, not matter
how egregious the crimes they allow.
WAR PAPER MONEY GOLD AND GOLDMAN SACHS
Even the most powerful are vulnerable and the powerful know this most of
all.
The foundation stone of the ruling elites is their control and issuance
of paper money. Over the years since paper money was substituted for gold
and silver, the power of bankers and government has steadily grown.
Their power, however, is being threatened by their abuse of that which made
their power possible. The accelerating debasement of paper money by bankers
and government now threatens the power of each; and gold which was
eliminated by public governments at the behest of private bankers now
threatens the franchise of power and wealth of both bankers and government.
The greed of bankers is equally matched by the greed of government. Only the
nature of the greed distinguishes the two. Bankers crave profits whereas
governments crave power and it was the mutual pursuit of each that caused
their dark alliance over three centuries ago.
King William of England, bankrupted by his wars with France and wanting
more, agreed to allow private bankers to issue their paper script as
England's money in return for the banker's credit that would allow him to
wage more wars, credit which became debt to be assumed by the people of
England as a national burden.
Nonetheless, as long as gold was considered to be the basis of money,
commerce flourished during the 18th and 19th centuries even as England
exerted control over much of the world through its ability to raise armies
and navies on credit.
Part 2
The unraveling of currencies began, however, when Europe abandoned the gold
standard in the early 20th century as it edged closer and closer to war -
wars are fought much more cheaply with paper money than with gold - and
after two World Wars, all nations were bankrupted by the considerable cost
of war - all nations except the US.
At the end of WW II, the US owned more gold than any nation previous, even
more than England at the height of its empire. However, this was not enough
for the US.
Aspiring to exert global control just as had England one century
before, the US would overspend its entire gold reserves in less than twenty
years.
YOU CAN NEVER GET ENOUGH OF WHAT YOU DON'T REALLY NEED
ERIC HOFFER
After WW II, because of its then enormous gold reserves, 21,775 tonnes
(metric tons), the US dollar backed by gold became the world reserve
currency.
But in the next 25 years, the US would overspend its gold reserves
by supporting a worldwide military presence in peacetime and could no longer
convert its US dollars to gold by 1971; by so doing, all currencies of all
nations then became but paper currencies of indeterminate value.
Ever since then, central banks and especially the US Fed have fought to
maintain the advantage that paper money gives them. But, because the
original basis of paper money, gold, had been squandered by the US
government's insatiable need for power, the paper-based franchise of power
and money began to unravel after the 1970s.
The unraveling has been fought with all available resources by bankers and
government for the considerable privileges of each are now at risk. Indeed,
without central bank credit and paper money, most bankers and those who
benefit by government largesse would be forced to seek gainful employment in
order to survive.
In the battle to maintain their considerable franchise of money and power,
Goldman Sachs has been at the forefront in actively supporting the
suppression of the gold price; as any rise in the price of gold belies the
value of the paper money by which governments and bankers are advantaged.
It is perhaps appropriate that Lawrence Summers, co-author of Gibson's
Paradox and the Gold Standard (a bizarre paper that fueled central bank
efforts to suppress the price of gold in the 1990s) is now the top economic
advisor to Barack Obama at the very time the US attempts to maintain its
world dominion based on an increasingly unstable US dollar - a dollar no
longer backed by gold.
For an in-depth explanation of the gold standard, free of the prejudices of
those who personally benefit from the fraud of paper money such as Lawrence
Summers, I suggest the Gold Standard University Live lecture series of
Professor Antal Fekete. (www.goldvid.com/fekete/sales.html)
Goldman Sachs has been alleged by many to be at the center of the central
bank conspiracy to manipulate the gold price.
In 1999, when England
announced it would sell the majority of its gold reserves at the very bottom
of the gold market, the rumors were that Goldman Sachs had a 1,000 tonne
short position in the market and couldn't cover its short position if the
price of gold moved higher.
HR: ROTHSCHILD'S CENTRAL BANKS GOLD WAR
by Henk Ruyssenaars
Aug 30, 2009
In May 1999, Gordon Brown, the UK Chancellor of the Exchequer, announced the
sale of 415 tonnes of gold, 57% of England's gold reserves. This sale forced
the price of gold lower thereby saving Goldman Sachs' large bet that the
price of gold would continue lower, albeit temporarily.
Goldman Sachs' attempts to suppress the price of gold have not abated nor
have the efforts of European and the US central banks even has gold has
risen from $275 to over $900 in the last ten years. The Swiss central bank
especially has been a large seller of gold whenever gold prices rise
quickly.
Such efforts have not abated because the on-going credit crises now
threatens to become a full-blown currency crisis; and, the paper money
franchise by which bankers and governments exist is vulnerable as never
before-a meteoric rise in the price of gold would spell the end of the
fabled franchise of wealth and power.
Now in 2009, the US, the UK, their gold reserves almost depleted, and the
world are on the verge of another Great Depression as the bankers' crisis
has turned into a global nightmare.
At the same very time, however, Goldman
Sachs is about to record profits enabling record bonuses while Gordon Brown
is now the Prime Minister of England.
THE RISE AND DECLINE OF NATIONS: ECONOMIC GROWTH, STAGFLATION, AND SOCIAL
RIGIDITIES
by Mancur Olsen
Many have been puzzled by the mysterious decline or
collapse of great empires of civilizations and by the remarkable rise to
wealth, power, or cultural achievement of previously peripheral or obscure
people.
Mancur Olsen
1982
Mancur Olsen's thoughts about empire, economic growth, stagflation
and social rigidities bear special reflection at this time. It is clear that
the present times, while new to us, may not be new to the cycles of history,
cycles which continue whether we are aware of them or not.
Although history happens in the aggregate, it is experienced personally and
each of us has a different window on what is now transpiring. That the
collapse of the US is unexpected to most is because most took refuge in
denial, willingly believing the lies told them by those in power, lies that
were compatible and acceptable to their unexamined and carelessly accepted
world views.
The following comment should be considered by all, especially those in the
US, who are now about to have their once well-ordered lives turned upside
down and inside out by forces they do not understand:
…we're a country that, for the last decade, acquiesced meekly and quietly as
our Government transferred huge amounts of national wealth to a tiny elite;
launched a devastating war based on purely false pretenses; tortured, spied
on us and literally claimed the right to invalidate law and the
Constitution; and turned itself over to the highest bidders.
Source: Glenn
Greenwald, Salon.com, 3/21/09
And as long as the credit flowed, the band played on.
The music is now about to stop.
[end excerpt]
And, to give you some more food for thought: also never have the Chinese or
Russian leaders, or any other of the big 'Moral Knights' which now are on
the covers of the propaganda media asked for an investigation of 9/11.
They are people drinking from a well which is poisoned.
And has been as such for centuries.
"The king to the banker did say
Tis I who ride you this day
This day it is true the banker did say
But tomorrow tis
I who ride you."
And all for power and profit!