The Freefalling Dollar; Bush’s war on the Middle Class

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Sat, 13 May 2006 17:27:28 -0700 (PDT)

The Freefalling Dollar; Bush's war on the Middle Class

 

 

 

 

The Freefalling Dollar; Bush's war on the Middle Class

Mike Whitney

 

May 13, 2006

 

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 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

theirdollar-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 order.