Dollar hegemony - Nov 2
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The Dollar's Full-System Meltdown
Mike Whitney, Centre for Research on Globalisation
...The administration never created a funding mechanism for the $400 million tax cuts or for the 35% expansion of the Federal government. Defense spending increased by leaps and bounds as did the “no-bid” contracts for friends of the Bush clan. At the same time, interest rates were lowered to rock-bottom to put as much money as possible into the hands of people who couldn’t meet the traditional criteria for a mortgage. And, if gluttonous waste, reckless overspending and “Mickey Mouse” loans were not enough; the Fed capped it off by doubling the money supply in 7 years; a surefire prescription for hyper-inflation.
So, which one of these policies was not deliberate?
The financial crisis that we now face was created by design. It is intended to destroy the labor movement, crush the middle class, quash Medicare, Medicaid and Social Security, reduce our foreign debt by 50 or 60%, force a restructuring of America’s debt, privatize all public assets and resources, and create a new regime of austerity measures which will divert more wealth to the banking and corporate establishments.
The avatars of neoliberalism invariably use crooked politicians to spawn enormous “unsustainable” debt so that the nations’ riches can be transferred to ruling elites. It works the same everywhere. It’s a form of corporate colonization, only this time the victim is the good old USA.
...Capital has no loyalties. It follows the markets. When America’s bustling consumer market stalls, we’ll undergo capital flight just like everywhere else. The 3 million lost manufacturing jobs, the 200,000 lost high-paying high-tech jobs, the tax incentives for major corporations doing business outside the country; all signal that corporate America has already loaded the boats and is headed for more promising markets in Asia and Europe. A sluggish consumer market could further weaken the dollar and force Americans to begin saving again but, (and here’s the surprising part) the decision-makers at the Federal Reserve and the Treasury Dept don’t really care if the face-value of the greenback goes down anyway.
What really matters is that the dollar retains its position as the world’s reserve currency. That allows the Federal Reserve to continue to print the money, set the interest rates, and control the global economic system. The dollar presently accounts for 66% of foreign currency reserves in central banks across the globe, an increase of nearly 10% in one decade alone. The dollar has become the international currency, a de-facto monopoly. This is the goal of the globalists and the American ruling elite who dream of one system, the dollar-system; with us running it.
So, how will this cadre of plutocrats coerce the other nations to continue to use the dollar while it plummets from its perch?
As long as oil is denominated in dollars, the central banks will be forced to stockpile American scrip regardless of its value. It’s no different than holding a gun to someone’s head. They will use our debt-plagued greenbacks or their cars and trucks will sputter, their tractors and factories will wheeze, and their economies will grind to a halt. It’s just that simple.
(31 Oct 2006)
Syria switches to the Euro due to US sanctions
Roee Nahmias, ynetnews.com via Centre for Research on Globalization
Source say country intends to switch foreign currency surplus from dollars to euros, in order to pay external debts and combat US economic sanctions
A Syrian source told the London-based Al-Hayat newspaper that Syria has begun taking a number of significant steps to deal with US sanctions barring trade between the two countries.
According to the report, Syria has decided to exchange its foreign currency surplus - some USD 20 million - to Euros, and use the sum to pay off external debts.
Furthermore, Euros were used as the currency in recent agreements with a number of countries, aimed at addressing the country's external debt of some USD 3 billion.
Syria's Central Bank Governor Dr. Adib Mayala said Tuesday that the nation "would rid itself of the relationship between the Syrian lira (pound) and the US dollar at the beginning of the upcoming year."
(2 Nov 2006)
Gulf oil states ‘keep faith in dollar assets’
Richard Dean, Financial Times
Gulf oil producers will continue buying dollar-based assets with their windfall revenues, but not all the money will flow into the US, according to Mohsin Khan, director of the IMF’s Middle East and Central Asia department.
Gulf oil producers including Saudi Arabia, Kuwait and the United Arab Emirates will record current account surpluses of $239bn (€190bn, £128bn) this year, rising to $259bn in 2007, a new IMF report says.
“We are seeing a shift away in location, but not necessarily in dollar-based assets,” Mr Khan told the Financial Times. “You can acquire dollar assets virtually anywhere.” These include eurobonds, and direct investments in Asia and the Middle East.”
He said there were still some trophy assets being acquired – “if you are buying a little bit of Ferrari or Hermes or Madame Tussauds” – but the big investments were going on in refineries in China, in real estate in Pakistan and telecoms in Egypt. “These are dollar-based.”
(9 Oct 2006)
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