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 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 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 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.
http://www.informationclearinghouse.info/article13028.htm
[Proofreader's note: this article was edited for spelling and typos on May 15, 2006]
Note: http://www.informationc...
A Freefalling Dollar And Bush's War On The Middle Class
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<a href="http://www.encyclopedia.com/html/g1/greenbac.asp">http://www.encyclopedia.com/html/g1/greenbac.asp</a> <br />
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<a href="http://en.wikipedia.org/wiki/History_of_the_United_States_dollar">http://en.wikipedia.org/wiki/History_of_the_United_States_dollar</a> <br />
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There is NO MONEY! there are debt instruments<br />
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<a href="http://www.the7thfire.com/debt_elimination/understanding_bank_fraud_3.htm">http://www.the7thfire.com/debt_elimination/understanding_bank_fraud_3.htm</a><br />
Money" would vanish without debt. <br />
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It is difficult for Americans to come to grips with the fact that their total money-supply is backed by nothing but debt, and it is even more mind boggling to visualize that, if everyone paid back all that was borrowed, there would be no money left in existence. <br />
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That's right, there would not be one penny in circulation -- all coins and all paper currency would be returned to bank vaults -- and there would be not one dollar in any one's checking account. In short, all money would disappear. <br />
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Marriner Eccles was the Governor of the Federal Reserve System in 1941. On September 30 of that year, Eccles was asked to give testimony before the House Committee on Banking and Currency. The purpose of the hearing was to obtain information regarding the role of the Federal Reserve in creating conditions that led to the depression of the 1930s. <br />
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Congressman Wright Patman, who was Chairman of that committee, asked how the Fed got the money to purchase two billion dollars worth of government bonds in 1933. <br />
This is the exchange that followed. <br />
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ECCLES: We created it. <br />
PATMAN: Out of what? <br />
ECCLES: Out of the right to issue credit money. <br />
PATMAN: And there is nothing behind it, is there, except our government's credit? <br />
ECCLES: That is what our money system is. If there were no debts in our money system, there wouldn't be any money. <br />
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It must be realized that, while money may represent an asset to selected individuals, when it is considered as an aggregate of the total money supply, it is not an asset at all. A man who borrows $1,000 may think that he has increased his financial position by that amount but he has not. His $1,000 cash asset is offset by his $1,000 loan liability, and his net position is zero. Bank accounts are exactly the same on a larger scale. Add up all the bank accounts in the nation, and it would be easy to assume that all that money represents a gigantic pool of assets which support the economy. Yet, every bit of this money is owed by someone. Some will owe nothing. Others will owe many times what they possess. All added together, the national balance is zero. What we think is money is but a grand illusion. The reality is debt. <br />
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Robert Hemphill was the Credit Manager of the Federal Reserve Bank in Atlanta. In the foreword to a book by Irving Fisher, entitled 100% Money, Hemphill said this: <br />
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If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash, or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless situation is almost incredible -- but there it is. <br />
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With the knowledge that money in America is based on debt, it should not come as a surprise to learn that the Federal Reserve System is not the least interested in seeing a reduction in debt in this country, regardless of public utterances to the contrary.<br />
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Here is the bottom line from the System's own publications. The Federal Reserve Bank of Philadelphia says:<br />
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"A large and growing number of analysts, on the other hand, now regard the national debt as something useful, if not an actual blessing....[They believe] the national debt need not be reduced at all." <br />
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The Federal Reserve Bank of Chicago in Modern Money Mechanics adds:<br />
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"Debt -- public and private -- is here to stay. It plays an essential role in economic processes.... What is required is not the abolition of debt, but its prudent use and intelligent management." <br />
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<p>---<br>The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing.... : Albert Einstein
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"Unthinking respect for authority is the greatest enemy of truth."
(Albert Einstein)
In short, debt is good when it is used by power elites to rule and steal, but not good when it is used for the feeding, enhancement and education of the unwashed.
The same people who are praising debt in the service of ruling classes, like the manipulators of the IMF and WB, are also the ones who destitute countries and destroy societies by condemning it, forcing the privatization of life supporting systems as " efficiency measures".
Ed Deak. Big Lake, BC.