Rich countries band together, mount goal line defense

The central banks continue to stabilize currency exchange rates where they are and find any opening for loan expansions.

“If drawn upon, the Fed said, these arrangements would support operations by the central bank to provide liquidity of up to 30 billion pounds (44.5 billion dollars), 80 billion euros (107.2 billion dollars), 10 trillion yen (99.7 billion dollars) and 40 billion Swiss francs (35.4 billion dollars).

“The currency swap arrangement announced Monday reflect tie-ups the four foreign central banks have had with the Fed allowing them to borrow dollars since last year, when financial turmoil started wreaking havoc across the globe, stemming from a US home mortgage meltdown.

“The European Central Bank and the Swiss National Bank have conducted auctions of dollar-denominated loans during the 2009 first quarter to help companies meet financing needs.”(1)

This unity is actually just on paper. There is no way for semi-public sectors to overcome demands from the private sector because of their relative sizes.

Some countries in the European Union are better prepared for a rise in the Euro than others. That will be another complicating factor. Germans might be willing to open malls for more imports; whereas others might not.

The ultimate way of keeping things liquid is to print money. That is one way for the dollar to fall.

Shortly after this article came out, an article on speculator George Soros’s views arose on the Internet. He views the dollar as doomed and the United $tates headed for Japanese-style slow-slog, with the added benefit of inflation.(2)

“It felt very good for 25 years but now we are paying a very heavy price,”(2) he said. Feel-goodism is the new Dark Ages attitude.

MIM concurs. We’ve held that it was not really Milton Friedman who figured out the U.$. economy, but Deng Xiaoping. We have been saying for many years that Deng Xiaoping propped up the U.$. economy with surplus value that came online after the death of Mao in 1976, and especially after 1979. Coincidentally, that is also when the trade deficit exploded. In 1980, the United $tates became a majority of white collar workers among whites, but zombie parties continued on their stupid old path and viciously resisted MIM’s proletarian onslaught.

Notes:
1. http://www.google.com/hostednews/afp/article/ALeqM5jxeKApMtauhT8EQvAiFDABlSGyww
2. http://www.cnbc.com/id/30069223

Tags: dollar bubble, George Soros