"Margin Call from Hell"
The crisis that began seven years ago with easy lending and subprime mortgages, has entered its final phase, a currency war between the world’s leading economies each employing the same accommodative monetary policies that have intensified market volatility, increased deflationary pressures, and set the stage for another tumultuous crack-up. The rising dollar, which has soared... Read More
Ukraine War Driven by Gas-Dollar Link
If there was a way the United States could achieve its long-term strategic objectives and, at the same time, avoid a war with Russia, it would so. Unfortunately, that is not an option, which is why there’s going to be a clash between the two nuclear-armed adversaries sometime in the near future. Let me explain:... Read More
The Latest in the New Cold War
The United States failed operation in Syria, has led to an intensification of Washington’s proxy war in Ukraine. What the Obama administration hoped to achieve in Syria through its support of so called “moderate” Islamic militants was to topple the regime of Bashar al Ass
Escape From The Dollar
Paul Craig Roberts thinks the Fed has backed itself into corner. A rise in interest rates would strengthen the dollar, give the dollar new life as world reserve currency, and halt the movement into gold, but a rise in rates would collapse the bond and stock markets and reduce the value of derivatives on the... Read More
Barack Obama’s economic recovery has been a complete bust. Unemployment is high, the economy is barely growing, and inequality is greater than anytime on record. On top of that, inflation has dropped to 1.2 percent, private sector hiring continues to disappoint and, according to Gallup’s “Economic Confidence” survey, households and consumers remain “deeply negative”. More... Read More
The Buck Stops Where?
Paul Volcker is worried about the future of the dollar and for good reason. The Fed has initiated a program (Quantitative Easing) that presages an end to Bretton Woods 2 and replaces it with different system altogether. Naturally, that's made trading partners pretty nervous. Despite the unfairness of the present system--where export-dependent countries recycle capital... Read More
"Save Those Greenbacks for Fishwrap!"
Deflation is not a problem because the Fed can always create inflation by printing more money. Wrong. While it's true that the Fed can print as much money as it chooses, adding to the money stock does not decrease deflation or increase inflation. It merely adds to reserves at the banks. Here's how British economist... Read More
QE2 and Last Rites for the World's Reserve Currency
Millions of Americans have no idea what Quantitative Easing is or how it will effect them personally. That's why Wednesday's announcement that the Fed will purchase another $600 billion in US Treasuries merely reinforced feelings of helplessness and a sense that government spending is out-of-control. Unfortunately, Ben Bernanke's rambling explanation of QE2 in a Washington... Read More
An Interview With Economist Menzie Chinn
Menzie Chinn, co-author of The Economic Integration of Greater China, teaches economics at the Robert M. LaFollette School of Public Affairs at the University of Wisconsin. Whitney: What is the present composition of reserve holdings in central banks, and has there been a substantial falloff in US dollar reserves in recent years? Are central banks... Read More
"Obama Demands Pay in Euros!"
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... Read More
Back to Business as Usual
The dollar is not going to crash. There may be grumblings in foreign capitals and "secret meetings" between finance ministers but, for now, the dollar appears to be safe. Foreign countries don't trade in dollars because they like America. They do it because they have no choice. If they want oil, they need dollars; it's... Read More
Is the Sky Really Falling?
Robert Fisk lit the fuse with his hyperventilating narrative which appears in Tuesday's UK Independent which went viral overnight spreading to every musty corner of the Internet and sending gold skyrocketing to $1,026 per oz. Now every doomsday website in cyber-world has headlined Fisk's "shocker" and the blogs are clogged with the frenzied commentary of... Read More
Hanging By a Thread
The Republicans are convinced that hyperinflation is just around the corner, but don't believe it. The real enemy is deflation, which is why Fed chief Bernanke has taken such extraordinary steps to pump liquidity into the system. The economy is flat on its back and hemorrhaging a half a million jobs per month. The housing... Read More
"We're All Linked"
Things are getting worse. Since September, $16 trillion has been erased from global stock market value. Losses in the US--where the financial turmoil originated--have been much smaller than other, more vulnerable markets. The Dow is down less than 40 percent from its peak of 14,000, whereas Hong Kong, Poland and China have all tumbled more... Read More
The Incredibly Shrinking Dollar? Think Again ... Greenback Surges, Euro Shrivels
The greenback has surged 6 per cent in the last month alone. The euro, on the other hand, has been caught in the same recessionary downdraft that is buffeting a number of other currencies, all of which are unwinding at the same time although unevenly. Currency markets don't move in straight lines, but don't be... Read More
"A Massacre of the World's Poor"
Food riots have broken out across the globe destabilizing large parts of the developing world. China is experiencing double-digit inflation. Indonesia, Vietnam and India have imposed controls over rice exports. Wheat, corn and soy beans are at record highs and threatening to go higher still. Commodities are up across the board. The World Food Program... Read More
Even Larry Summers Predicts Doom
Lately it seems as though everyone wants to take a poke at the dollar. Last week, it was the Brazilian supermodel who demanded euros for her jaunts on the catwalk instead of USD. The week before that, hip-hop impresario, Jay-Z, released a video dissin' the dollar and praising the euro as the 'baddest Dude in... Read More
The Long Fall
America is finished, washed up, kaput. Foreign investors and central banks around the world have lost confidence in US markets and are headed for the exits. The dollar is sinking, the country is insolvent, and its leaders are barking mad. That's bad for business. Investors are voting with their feet. They've had enough. Capital is... Read More
Plummeting Dollar, Credit Crunch...
The days of the dollar as the world’s “reserve currency” may be drawing to a close. In August, foreign central banks and governments dumped a whopping 3.8 per cent of their holdings of US debt. Rising unemployment and the ongoing housing slump have triggered fears of a recession sending wary foreign investors running for the... Read More
Doomsday for the Greenback?
The American people are in La-la land. If they had any idea of what the Federal Reserve was up to they'd be out on the streets waving fists and pitchforks. Instead, we go our business like nothing is wrong. Are we really that stupid? What is it that people don't understand about the trade deficit?... Read More
Everything He Touches Turns Into Someone Else's Gold
Gold traders love Dick Cheney. Every time he opens his twisted lip and barks out another threat to Iran, the dollar takes a powder and gold futures shoot to the moon. Maybe that's the way Cheney likes it. After all, he dumped about $25 million in euro-bonds before he took office. Judging by the way... Read More
Hard Times on the Way
In the next few months, a financial crisis will arise somewhere in the world which will jolt the American economy and trigger a swift and precipitous decline in the value of the dollar. This is not speculation; it will happen and there is nothing that the Bush administration can do to stop it. All of... Read More
The Controlled Demolition of the Dollar
The great dollar sell-off has begun in earnest, although to a large extent, it's being concealed from the public. Wary currency traders have been expecting a dollar-slide for months but were nervous about the possibility of widespread panic. Everyone from Bill Gates to Paul Volcker has predicted that the current trade deficit of $800 billion... Read More
Obliterating the Dollar ... and the Middle Class?
Gold traders love George Bush. They know that his blundering mismanagement of the economy will keep gold soaring well into the future. In the last year alone gold increased nearly $200 an ounce capping off a 5 year run that has taken it from $274 per ounce to $635 at Friday's close. These are serious... Read More
Last Thursday's press conference was pure Greenspan. The shriveled Fed-master used his trip to Germany to deliver the roundhouse punch that many had expected for two years. He "warned that the deficit in US trade with the rest of the world could not be sustained indefinitely."(BBC) Really? Does anyone seriously believe that this "road to... Read More