Posts Tagged ‘dollar bubble’

The end for the dollar privilege?

October 6, 2009

The British media is now reporting and as MIM requested, Arab countries are apparently giving up the dollar for the creation of a new currency.

Note:
http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

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Dollar bubble update

August 19, 2009

The BBC published a useful article on China’s dollar holdings. China actually cut its U.$. debt holdings 3% in June, a record in recent years. In 2008, it was China that rescued the United $tates, by increasing holdings of U.$. debt by 52%.

Japan and England have picked up slack for the United $tates this year, while China’s holdings of U.$. debt have grown only 7% so far this year total.(1)

Amerikan debt-holders should continue to push the United $tates in a diplomacy-first direction. There is still much potential in cutting military and wasteful homeland security spending. There are many in key places who agree.

Amerikkkan media bloviators are used to pummeling Iran, Korea and Arabs generally. They must learn to get past their old conflicts to cut back on their parasitism.

Bloomberg reports that “Russian President Dmitry Medvedev last month illustrated his call for a supranational currency by producing a sample coin after a summit of the Group of Eight nations.”(2) President Medvedev also said today that he is working on Mideast peace with I$raeli president Peres.(3)

On a technical note for the dollar, Japan, Germany and France returned to economic growth in the second quarter of 2009.(4) Although the U.S. Federal Reserve put out feelers for increasing the interest rate soon, it appears that other countries will be able to raise interest rates sooner than the United $tates if the surprise growth of France and Germany turns out to be true. Higher relative interest rates boost currency values.

The case for a new currency remains strong. When China, India and the oil producers agree, there can be a new reality.

Notes:
1. http://news.bbc.co.uk/2/hi/business/8207174.stm
2. Garfield Reynolds and Wes Goodman, “Pimco Says Dollar to Weaken as Reserve Status Erodes,” http://www.bloomberg.com/apps/news?pid=20601087&sid=aLW8jvysIe5k
3. http://www.google.com/hostednews/afp/article/ALeqM5hYRIpxIok0qqfYv6WKzsLU82lEBw
4. http://carnegieendowment.org/publications/index.cfm?fa=view&id=23617

Sayyid Qutb on economics of idolatry

August 14, 2009
  • See also, “Sayyid Qutb, influential Islamic author”

    [We currently have a struggle against a form of idolatry, itself a form of polytheism. That idolatry is love of the U.$. dollar beyond its true worth. This pernicious avenue of exploitation robs the Third World of hundreds of billions each year. Now we turn to a quote from Sayyid Qutb about struggles like this one — MIM.]

    “Yet others in the Muslim community, some of whom might have been among the noblest and most dedicated Muslims, might have feared economic depression ensuing from the disruption to business transactions in Arabia as a result of declaring war against all Arabian idolaters. That was bound to affect the pilgrimage season, particularly after it had been announced that no idolater would be allowed to go on pilgrimage after that year, and that idolaters would not be allowed to enter into mosques and places of worship. Such people’s fears were made greater by the fact that such a step was not particularly necessary. Its outcome could have been reached in a slower but more peaceful way. But, as we have said, God wanted the basic bond to unite people in the Muslim community to be the bond of faith, so that faith should be felt to have far greater weight than blood relationships, friendships and economic interests. He also wanted the Muslims to realize that He alone gave them all the provisions they had and was their only provider. The means they might have had to earn their living were not the only ones He could have granted them.

    “There were others in the Muslim community who lacked strength of faith, or were hesitant, or who were hypocrites, or who might have been among the large numbers who embraced Islam but had not yet fully absorbed its truth. Most of these feared the possibility of open warfare with the idolaters, the economic depression that might result from war, the lack of security for trade and travel, the disruption of contacts and transport and worried about the likely costs of mounting a jihad campaign.”

    Albert J. Bergesen, ed., The Sayyid Qutb Reader: Selected Writings on Politics, Religion, and Society (Routledge, NY: 2008), p. 90. See also, p. 92, “verse 28.”

    Egypt executed Qutb in 1966, so he did not see this current international economic crisis. However, his quote above still reads as if good as new.

    The struggle against the dollar links together many social forces. Successful struggle loosens the U.$. grip on its world-leading millions of prisoners; makes U.$. military domination of the world more expensive; reduces the cost of paying back most Third World debts and overall undercuts Amerikkka’s greatest power — its power to alienate the Third World’s labor for use against itself.

  • For an international currency: An open letter to UN President Miguel d’Escoto Brockmann

    April 17, 2009

    Dear UN President Miguel d’Escoto Brockmann:

    I would like to propose myself as the head of a new central bank for a new global currency with a focus on trade facilitation and investment.

    For such a bank to become a reality, we need important diplomatic and economic commitments.
    1. The Arab League and Russia must accept the new currency as payment for oil.
    2. The Chinese state sector must accept the currency for commodities and China should make a five year plan to phase out use of the dollar within its territory, including in the private sector.

    With these core commitments as a critical mass, the bank can extend from there and achieve take-off for its currency. It is a mistake to believe that other banks can squelch such a bank via access to old means of wealth. The ability to secure labor-produced commodities and natural resources going forward is the real source of economic power.

    The strength of a currency is not based in old wealth, much less the clothing bankers wear or the buildings they sit in. The strength of a currency is based on what commodities can be obtained for it.

    The exploited countries that have yet to reach the imperialist phase of capitalism have much to gain by an international bank with real clout behind it. Currently, the national bourgeoisie is delivering hundreds of billions and trillions in annual aid to the rich countries, because the developing world has outgrown the old banking system.

    The academics from the West failed to point out this problem and while the World Bank and IMF continue to evolve, there is much room for a bank that suits the needs of the majority of the world’s people. Such a bank will exert a much-needed influence in universities around the world.

    While Russia has raised the idea of a joint Russia-China currency, the full gains of a new currency stem from gaining its widest acceptance and serving the largest unfilled needs. Serving as the head of an effective central bank with the above commitments would be more useful than being president of the United States. Such a bank can contribute to the solution of the world’s most vexing geopolitical problems.

    As a central banker, I have no vested interests in any business interests or country. This makes me well-suited to head up the new currency effort. I would like a 20 year term and a five year training period before my board of directors can replace me for incompetence or negligence.

    Many of the countries that would most benefit from such a bank have been reluctant to take up classic forms of imperialism and usury. I can detach the new currency from such concerns, while still doing the most to aid the national bourgeoisie of the exploited countries.

    Many of the economic development and geopolitical problems we see in the world stem from internalized racism. A new central bank should also train people how to recognize what is really innovation and productivity and what is really just old wealth and exploitation calling itself innovation, productivity and hard work. The current economic crisis has exposed the old way of doing things as literally and figuratively bankrupt.

    In the old system, the individual countries compete through a system of neo-mercantalism that has long ago been discredited. To advance international trade and prosperity to the next level, we need a bank unattached to Western interests and prejudices.

    As central banker, I will be able to influence all economic negotiations with the West. Our protectionist national bourgeoisie is caught on a treadmill of ever worsening exploitation in order to compete for Western markets. Exchange rate fears stem from this economic competition and the internalized racism that goes with it. To overcome this difficulty, the central bank must have the power to invest, not just influence exchange rates. In the current economic system, it is only through the power to create money that trade-related fears about exchange rates can be overcome. The developing world is long past due for better indigenous means of investment.

    The economists of the West recognize that the prosperity of the developing world means better markets for their countries’ goods. When we see the private sector in the Third World delivering money to the United States in the purchase of Treasury notes or bonds that effectively bear 0% interest or close to it, we must act on the urgent need to create a credible currency alternative to the dollar and promote investment opportunity in the Third World and other non-dollar zones.

    Sincerely,
    Henry Park

    UN General Assembly president calls G-20 a failure

    April 16, 2009

    President Miguel d’Escoto Brockmann of the UN General Assembly has said that the G-20 meeting just convened was a failure and did not do enough to address the economic problems created by a crisis worse than the Great Depression.(1) He is calling for the greatest meeting of the UN in its history to deal with the crisis, June 1-3.

    We have to agree that the G20 agreement was too small for what is happening.

    We are long past due for hearing from more Third World economists on how to improve the international financial system. The UN meeting will touch on the dollar and whether a different currency can take over its role.(2)

    The economic crisis has opened up the brains of youth and government and corporate leaders globally.


    Notes:

    1. http://news.xinhuanet.com/english/2009-04/16/content_11191814.htm
    2. http://www.reuters.com/article/usDollarRpt/idUSN1443904220090414

    Rich countries band together, mount goal line defense

    April 7, 2009

    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

    UN panel, Joseph Stiglitz for ending dollar parasitism

    March 27, 2009

    Hell freezes over;
    Bourgeois economists change their minds;
    Supposed rich country “left” still in Church of Parasitism

    “On the monetary front, Stiglitz, the 2001 Nobel economics laureate, told a press conference here there was ‘a growing consensus that there are problems with the dollar reserve system.’

    “He noted that such a system was ‘relatively volatile, deflationary, unstable and (had) inequity associated with it.’

    “‘Developing countries are lending the United States trillions dollars at almost zero interest rates when they have huge needs themselves,’ Stiglitz noted. ‘It’s indicative of the nature of the problem. It’s a net transfer, in a sense, to the United States, a form of foreign aid.'”

    Joseph Stiglitz is also on board with Krugman that Geithner’s plan amounts to a stumble most likely and a massive taxpayer subsidy to investors in the best case.(2)

    Stiglitz is the most cited author among professional U.$. economists. He says that it is possible to roll out a new system within a year, but he says reality probably dictates no sooner than 2013.(3)

    Meanwhile the left-wing of parasitism continues with its deafening silence in refusing to admit the truth of MIM’s line on imperialist country “workers” — that by trade deficit figures alone, they’re parasites. That’s before getting into the real depth of Marx’s theory of surplus-value: it’s that blatant and MIM’s opponents ARE that racist.

    The international united front has imperialism right where it wants it. The imperialists should be begging for currency reform, but the international united front has plenty of time to get in some mortal blows against capitalism if the need arises in coming months.

    Notes:
    1. http://www.breitbart.com/article.php?id=CNG.18e9e5692442aa61d7510553b5ffc14e.8b1&show_article=1
    http://www.un.org/apps/news/story.asp?NewsID=30309&Cr=financial+crisis&Cr1=
    2. http://www.reuters.com/article/reutersEdge/idUSTRE52N1IQ20090324
    3. http://www.cbsnews.com/blogs/2009/03/26/world/worldwatch/entry4895876.shtml

    Trade dropping off a cliff

    March 26, 2009

    Life is strange when the British business paper “Financial Times” agrees with us Maoists in the context of discussion of international currency ideas: “America should not want the world to be yoked so tightly to its willingness to generate demand. Such imbalances are at the root of this crisis.”(1)

    There is thus a little more reality in what the business pundits say these days than what the politicians say. Gordon Brown is at the same time papering over differences among the global rich countries. The British government just failed to complete a debt sale for the first time since 2002.(2)

    Out-of-nowhere Germany has jumped on the Keynesian bandwagon with a stimulus program of 1.5% of GDP.(3) German exports are off 20.7% in January from a year before, but the German GDP is estimated only down 2.1% in the fourth quarter of 2008.

    More humungous news is that Japan’s exports are down over 49%.(4) Japan is the world’s second largest economy. Such a figure if maintained over the course of the year is very much on par or beyond the Great Depression. Exports to the United $tates are down 58%, the EU, 55% and China, 40%. Japan’s imports from the United $tates are down 36%.

    Meanwhile, CNN and others harped on a 22% increase in U.$. housing starts and a small increase in durable goods orders. The housing increase is from such a low level as not to be worth much, so there is a problem in how people perceive data. How the housing story beats the Japan exports story is beyond MIM.

    The first 20 days of March showed Korean imports down 40.3% and exports down 13.4%.(5)

    The UN Secretary General Ban-Ki-moon is growing on us here. He just called for $1 trillion for the developing countries (6) — and why not. He just saw the united $tates create $1 trillion out of thin air at the Fed and he knows that China has $2 trillion in currency reserves endangered by the vulnerabilities of the dollar and currency cycles.

    I’d make this the following item a story by itself, but it is too incredible to believe. So I’ll leave it here at the bottom of the story and wait for confirmation:


    “American exports have fallen at a 44 percent annual pace in the most recent six months of data, with imports shrinking 51 percent, Morgan Stanley analysts said.”(7)

    I’ve seen estimates of U.$. trade declines ranging from single digits to the above figures. The latest figure I have seen shows exports down 23.6% in the fourth quarter 2008 from the previous year (8) — well on our way to a Great Depression if the above paragraph is not true. The same report shows business investment down 21.7%, the most since 1975.(8)

    I would not be surprised if the WTO turned out to be low in its 9% decline of total world trade estimate for this year.(9)

    Notes:
    1. http://www.ft.com/cms/s/0/26884e1e-18ab-11de-bec8-0000779fd2ac.html?nclick_check=1
    2. http://news.bbc.co.uk/2/hi/uk_news/po
    3. http://www.bloomberg.com/apps/news?pid=20601109&sid=an0ME5IcV5bY&refer=homeitics/7962654.stm
    4. http://online.wsj.com/article/BT-CO-20090324-717564.html
    5. http://www.marketwatch.com/news/story/korean-official-expects-record-trade/story.aspx?guid=%7BFACFF12A-D170-471F-A9D6-823F8741CD47%7D&dist=msr_1
    6. http://www.reuters.com/article/gc08/idUSTRE52O58N20090325
    7. http://www.bloomberg.com/apps/news?pid=20601110&sid=atwLJSckGyUE
    8. http://www.reuters.com/article/topNews/idUSN2644751420090326?pageNumber=2&virtualBrandChannel=0
    9. http://www.bloomberg.com/apps/news?pid=20601087&sid=a6YFDO5LJO8c&refer=home

    Fed move implications

    March 20, 2009

    The creation of over $1 trillion in money announced by the Fed demonstrates the difference between parasitism and labor. The world’s exporters earned their dollars by — labor — a tough concept these days in the West. The United $tates government on the other hand earns dollars by printing them.

    Oddly, and as Krugman has noted in wonkish comments, the thing about pushing with a string, the nature of this liquidity trap could just be that a dollar of Fed action results in less than a dollar in non-Fed, non-government private sector action.

    Bernanke is out there buying everything financial that exists, so perhaps the real problem is a shrinking sector of vanilla business.

    Bernanke acts and auto loan rates perversely go up. Bond-traders bundle bonds to avoid regulation. He now says he was acting to aid the private sector lending,(1) but of course there are implications for the dollar bubble.

    MIM has not written much on the topic of how bureaucratic capital forms in the united $tates, because it is contrary to previous theory.

    Notes:
    1. http://www.bloomberg.com/apps/news?pid=20601087&sid=aAWzQMDmmdhk&refer=home

    Fed busts dollar bubble

    March 18, 2009

    In really big, underplayed news, the Federal Reserve created $1 trillion out of thin air.(1) This drove down the 10 year interest rate even further and created questions about imminent inflation.

    “Yields on the 10-year Treasury note dropped the most in one day since January 1962. At 2.53 percent, the yield on the benchmark security was 0.68 percentage point lower than that of the comparable-maturity German bund.”(1)

    The Euro rose the most against the dollar in almost nine years.

    Apparently, the Fed agreed with MIM about a dollar bubble and took hostile action against other dollar holders by increasing the money supply $1 trillion. It shows yet again why it is important for the national bourgeoisie to get out of the dollar bubble and not go back into it.

    The whole ploy also helps the Treasury Dept. sell its own notes. This is a strategy we have not seen before, but it means the government is printing money to fund Obama’s programs. Readers of MIM’s website knew that was going to happen before the Fed did it.

    MIM reported the truth in the interests of the Third World. The dollar bubble will not pop overnight, so there is still time for the national bourgeoisie to retreat from it with some gains. Readers should ask themselves who but MIM warned them.

    Notes:
    1. http://www.bloomberg.com/apps/news?pid=20601080&sid=aCsmmEbrDLM4&refer=asia