The BANKSTER Bailout Killed the Dollar<== BACK TO THE MELTDOWN WEBPAGE, WHO'S KEEPING SCORE? US!
What nobody in the corporate media is mentioning amid all the blather about
the 8.5 TRILLION DOLLAR BANKSTER BAILOUTS from Messsers Paulson &
later Treasury Czar Geithner is the impact the two will have on the US dollar.We are told that this huge gift to the financial sector—the assumption, at
top dollar, of all the bad debt they’ve piled up–will be at taxpayer
expense, but that’s only the half of it. (Really only the quarter of it
because since the US government is technically bankrupt already, spending
more than it takes in each year, all that money will be borrowed, and will
be added to the national debt, meaning that just as the real cost of the
$500-billion Iraq War is closer to $2 trillion, the real cost of the $8.5 trillion
bailout will be more like $15 trillion.) Down the highway.But besides the direct bill handed to taxpayers for this gigantic con, there
is the fact that adding that much to the national debt is also going to
drive the dollar down precipitously against foreign currencies. We’re
already seeing that happen, even while they’re just talking about the
bailout. The dollar is falling against all major currencies—the Euro, the
Yen, the Renminbi and the British pound. And it will continue to fall as the
details of the bailout come out.This will add to already powerful pressures in countries like Saudi Arabia
and China, which hold huge quantities of US dollars and US
dollar-denominated debt, to shift out of dollars and into other
currencies—particularly the Euro and the Yen. Last week, an article in
China’s People’s Daily, which like Pravda in the old Soviet Union, is the official
voice of the leadership in China, called for just such a move. Russia is
also calling for an end to the dollar as the underpinning of the global
economy.For some years now, many economists have been predicting an end to the
dollar as the world’s reserve currency, but this latest plan by the US
Treasury will push such a shift forward from “some day” to “now.”As long as the dollar has been the reserve currency—the currency in which
key commodities like gold or oil were priced, and the currency that
exporting nations stocked in their treasuries as a store of value – it was
protected against collapse. But once it loses that status, there will be
nothing to prop it up any longer, and it will quickly slide to a value that
it deserves. We got an inkling of what is going to happen as crude
oil prices leapt in the short time it took me to research and write this
essay (less than an hour!) by 25%, the biggest jump in the history of the
oil market. This timely vindication of my point was purely a move caused by
loss of confidence in the dollar. There was no oil supply disruption. In
fact, demand for oil has been sinking as the economic crisis grows. Oil
producers and traders simply realized that the dollar is going poof, so they
radically jacked up the cost of oil in dollars.If you want to see what where the dollar is headed, look to the currencies
of the debtor nations—countries like Mexico or perhaps Mozambique. A nation
that makes almost nothing, and that imports most of its needs, cannot have a
strong currency.This might not matter much if we had a functioning domestic economy, where
people could find the goods and services they needed without turning to
sources from abroad. A big country like the US could simply turn inward and
function on by its own domestic economic standards.I remember back when the former Soviet Union was in a state of economic and
political free fall in the early and mid 1990s, the currencies of the
constituent countries, like Russia, Ukraine and Belarus had had collapsed to
virtual worthlessness on the international market. A Byelorussian friend, an
engineering professor from Minsk, living and working near me in China at the
time, explained that although when he traveled the world, he felt like a
pauper, things weren’t so bad back home Belarus, where he and his family
would go in the summer. “My apartment only costs a few dollars a month to
rent,” he explained, “and our food is bought on the local market using
rubles, so it is very affordable.” The same was true for other needs, like
clothing and books for school, he explained. The only problem was buying gas
for his Russian Volga. “Gas,” he explained, “is priced as an international
commodity, so it takes me one month’s wages in Belarus to buy the gas to
drive once to and from our country dacha.”You can start to see the problem. Since agriculture has been killed off in
most of the US, in favor of giant agribusiness enterprises situated in the
western part of the country and some parts of the Midwest, most people
elsewhere will not have local produce available, and the cost of
transporting food from California to places like New York or Pennsylvania
will be prohibitive once the dollar collapses, since oil is priced
internationally. Meanwhile, goods like TV sets, computers, phones, cars (or
at least the key components of cars), clothing, etc., are no longer even
made in the US, and will thus be completely un-affordable. As for the service
jobs that are supposed to have replaced our old manufacturing sector, no one
will be interested in buying what they’re offering, because they’ll be
scrimping just to buy the key staples they need to survive, so of course
joblessness will soar.Eventually, of course, entrepreneurially minded people will begin
establishing local farms again where they once flourished generations ago,
and small factories will be built to provide key essentials, but all this
will take time, and will have to cater to a market of people operating at a
much lower standard of living.The banking sector, meanwhile, which is the proximate cause of this
monumental disaster, won’t mind any of this, for it will continue operating
on the international stage, shifting its focus to lending money (no longer
dollars, though), to growing economies in Asia and Latin America and eastern
Europe. And this is what, in truth, the “rescue” of Wall Street is all about.It’s not about saving Main Street, as Paulson claims. Main Street, under the
bailout, is toast. It’s about helping the banks and investment banks and
insurance companies that brought on this crisis to ride it out in style,
their astronomical losses bankrolled or absorbed by the American public, so
that they can shift their operations overseas and continue with their rape
and pillage of the global economy.The US will be left behind, a smoking ruin, with Americans, like Weimar
Germans before them, going shopping with wheelbarrows full of worthless
green paper to exchange for a few days’ groceries.ANOTHER TERRIFIC ARTICLE ON THIS THEME: http://www.naturalnews.com/News_000553_financial_crisis_Federal_Reserve_hyperinflation.html
NOTE: Anita updated text in this article above, found online, written at earlier date, late 2008