REAPING THE FRUITS OF FINANCE CAPITALISM

 

US balloon economy in a dive

 

US Economy in 'Relentless' Decline
Analysts say dollar will continue to slide no matter what
InfoWars Wednesday, 31 October 2007

By STEVE WATSON

Federal Reserve in Washington: Headquarters of Dollar Imperialism

WASHINGTON — Economic experts have predicted a continuing
slump for the dollar, no matter what the federal reserve does.
Others have suggested the dollar's decline is now relentless
and will only be accelerated as other countries abandon it for
stronger reserve currencies.

“The relentless slide in the dollar against other major currencies,
notably the euro, is encouraging speculation that Asian countries
and oil producers will step up diversification of their reserve assets
out of the US currency, accelerating its decline,” Capital Economics'
Julian Jessop has written today.

While Jessop states that the the dollar’s fall has been and will be
further driven by a slowing US economy and not by reserve asset
diversification, others are not so convinced.

Despite the fact that the Fed has today cut interst rates by a
quarter point, analysts at Market Watch believe the dollar is to
continue on a downward spiral now, no matter what:

"Whether the Fed cuts its benchmark a quarter percentage point,
as expected, or a half-point --or even not at all -- the dollar is likely
to bear the near-term brunt of the market's kneejerk reaction either
way, and then move in one direction: down." Lisa Twaronite states.

'US dollar is finally in trouble'

Regardless of whether or not the Fed cuts rates, "the dollar is in for
a beating," said Marilyn McDonald, marketing director at Interbank FX.

"The US dollar is finally in trouble. For quite some time now, it has
been one of the top five yielding currencies among the [Group of 10
industrialized] nations, which is why it has been used in the carry
trade for so long," she said.

Carry trades involve borrowing lower-yielding currencies, such as
the yen, and investing it in higher-yielding assets. The dollar has
long benefited from such trades, but the benefits are dropping in
line with US interest rates.

While the vast majority of analysts agree that the markets are in
deep trouble and the dollar is weak due to relatively poor economic
fundamentals, US Treasury Secretary Henry Paulson has said that
financial markets are recovering from the subprime crisis.

Paulson again echoed previous sentiments of the IMF, Alan Greenspan and Ben Bernanke, stating that while it was "definitely the case" that innovation in US capital markets had gotten ahead of regulatory controls, contributing to the crisis, such innovation remained desirable.

"I don't think we would want it the other way around. If we had it
the other way around, we'd be sacrificing growth and efficiency in
the markets."

Lower living standards for middle class

They have all continually badmouthed the dollar, claiming it is
"overvalued" despite the fact it has lost over half of its value against
the euro since 2001. The IMF, despite acknowledging "the likelihood
of a disorderly plunge in the dollar" and contrary to pleas from Europe has given the green light for traders to continue to sell the dollar.

In their World Economic Outlook brief, the IMF brazenly states that
the agenda in continually badmouthing the dollar is to exalt the Chinese renminbi in order to contribute to "a necessary rebalancing of demand and to an orderly unwinding of global imbalances."

In layman's terms, this means lowering the living standards of the
American middle class by tanking the dollar and sending oil prices
skyrocketing towards $200, as part of the "post-industrial
revolution" agreed upon by the Bilderberg Group. This would eviscerate the middle class and create a two-caste system based upon the Chinese model, where the super-rich live in opulence and the rest of the population are forced to struggle on the poverty line.

Meanwhile analysts at EconomicsBriefing.com have pointed out that while the UN is warning of ballooning food prices and the possibility of food riots, no one is saying or doing anything about the primary cause, US federal reserve encouraged, worldwide central bank monetary expansion.