House of Paine

ass beam III

i'm goin back in time

    so it ain't gettin better 

blame it all on orwell 19 



=======================


By Ass  Beam
    brother of fiddle head ted 


18 November 2004


The dollar is now down to $1.30 to the euro,
 a decline of 30 percent
 since Bush took office, 
with predictions 
that it could even hit $1.50.

 The main division over the dollar 
is between the United States 
and so-called “old Europe”, 

principally France and Germany.

 
Last week the president 
of the European Central Bank 
Jean-Claude Trichet 
described 
the recent currency movements 
as “brutal”,
 hinting at the need
 for coordinated intervention
 by major central banks.

 But the US does not regard 
the recent currency market movements
 as excessive 

with one Treasury official 
telling the Financial Times 
that markets were “operating very well” 
and displaying a “great deal of orderliness.”

This is not the view 
in the major eurozone countries
 where the decline of the dollar 
is seen as a major threat
 to export markets
 and consequently 
to European growth prospects.

------- nothing wrong up to here
except the typical pro wrestle phoney heel baby face schtick -------- --------------

 European governments maintain 
that the record deficits
 run up by the Bush administration 
have played a major role 
in the dollar’s fall.

-------true or not true
this is actually music 
to a bush
 ready to bash social spending -------

In an interview 
with the weekly magazine 
Der Spiegel, 
Germany’s deputy finance minister
 Caoi Koch-Weser
 warned that US trade and budget deficits 
were “unsettling markets”
 and called for action 
to ensure “sustained,
 medium-term budget consolidation”.

 He criticised the Bush administration’s 
tax cuts 
saying they were too heavily weighted 
to the rich,
 did little 
to boost the economy
 and worsened the budget deficit.

------- now thats a little nasty
             he'llneed 
to  send a "that tootse 
was just for the unemployed
and the hourly hicked 
  here at home
signal to the bushy boyz---------

The French finance minister 
Nicolas Sarkozy
 has made similar comments, 
warning that markets 
would only regain confidence 
in the dollar 
if the US cut its deficits. 
“This is the unanimous message 
from the Europeans 
and the International Monetary Fund 
that we send to the United States,” he said.

These criticisms 
will get short shrift
 from the Bush administration. 

According to Treasury Secretary John Snow,
 now visiting several European capitals 
prior to the weekend meeting,
 the problem is not 
the US deficits
 but the lack of growth 
in the European economy. 
Briefing reporters ahead 
   of Snow’s departure,
 a Treasury official said 
one of the reasons
 for the pressure on the dollar
 was subpar growth 
in a number of US trading partners.

“If the US is growing more rapidly 
than other countries, 
then exports from the US 
are growing less rapidly 
than they otherwise would. 
So if you get more rapid growth
 in Germany or
 in other countries 
not growing as rapidly 
as they should, 
that will be beneficial 
to our exports 
and help with the reduction
 in the trade deficit.”

The official went on to urge 
greater efforts 
to press China 
to adopt more flexible currency policies,
 leading to an upward movement 
of the yuan 
and easing pressure 
on the dollar.

However, 
these policy prescriptions, 
rather than offering solutions,
 only serve to highlight 
some of the contradictory features 
of the global economy. 

While economic growth 
is held out as the solution,
 the chief source of European growth
 is the expansion of export markets,

 which depend in turn 
on the value of the euro 
remaining competitive against 
the US dollar. 

In other words, 
there is a vicious circle at work.
 Growth in the European economy 
requires the maintenance 
of the value of the dollar,
 but a high dollar 
leads to a widening 
US trade deficit, 
thereby worsening 
the financial imbalances
 in the global economy.

Similarly, greater flexibility
 in the yuan 
and the Asian currencies
 more generally 
is also fraught with dangers. 

This is because 
the Asian central banks 
have spent hundreds of billions 
of dollars purchasing 
US financial assets 
in order to keep 
the value of their currencies 
low relative 
to the US dollar, 
thereby ensuring 
that their exports
 remain competitive 
in the American market.

Asian banks 
at the end of last year 
held an estimated $1.89 trillion 
of foreign reserves, 
most of it in US dollars. 
If the Asian currencies
 were revalued, 
significant losses 
would be incurred 
on these holdings.

 
Asian central banks are caught
 in an awkward dilemma:
 either they try to break
 the dollar’s fall, 
or they try to escape 
from underneath its collapse.


---------why need they escape ?
only if there's inflation in the us
will their dollars actually lose purchasing power
interest rates should rise 
in time to comp us inflation
 if actually appears

okay there is 
an  advantage if one is  holding euros 
as they go up against the dollar
but thats at worst 
a  missed opportunty for appreciation
 not a  loss of dollar market value  --------------


 
 in a major speech 
by the Governor 
of the Bank of Japan,
 Toshihiko Fukui, last week.

Addressing a symposium in Tokyo 
on the theme 

“The euro: five years on
—implications for Asia”,

 he said 
the emergence of a clear rival
 to the US dollar 
as a key global currency 
would have a stabilising effect 
on the global financial system.

Fukui told the seminar 
that since its launch 
the importance of the euro 
had already increased considerably.
 
In a thinly veiled reference
 to the US,
 he pointed to the dangers 
associated with allowing
 any single currency 
to dominate global commerce.

In such a situation
 the government 
of the key currency country 
was “easily tempted 
to focus its economic policy
 on domestic considerations,”
 he said.

“In today’s globalised economy,
 this could lead to
 undesirable ripple effects 
on the rest of the world, 
through the fluctuations 
of the external value 
of the key currency.” 

If there were two competing currencies,

 “competition between them 
could lead to more attention
 to the external value 
of key currencies” 
and this could have a
 “positive effect 
on the stability of the global
 financial system.”


----------- now this has some sense 
                but not much
after all
the us market is so huge 
who could bluff the fed to support the dollar
if the payments balance is more easily
improved by devaluations inevitable trade improvement -------

Such remarks will not be welcomed 
in the Bush administration for,
 together with the unease 
of the Europeans, 

-please !

we get all too much
lefty wishful thinking
that 
this means
" here comes 
the inter imperial titans war "
sorry geeps 
no way 

thats still 
a distant trumpet -----------


the  other major capitalist powers 
are growing increasingly resentful
 of the enormous advantages 
which the dollar’s role 
as the major world currency 
gives to the US 
and may start 
to promote alternatives.

-----------  fine but aren't you 
ignoring the reality of those advantages 

conjuring  financial " war clouds'
and iminent world market convulsions
is fun but fantasy -----------


That search could well be stimulated
 by conflicts over foreign policies.

 Within two weeks 
of the election, 
it is clear 
that the second Bush administration
 is going to intensify 
the unilateralist
 foreign policy approach
 which created such conflict with Europe.
 This means that economic measures 
may be used where diplomatic 
and other means have failed.

------------ okay now the capitalists
 are mixing
 pissery dissery
over 
 in your face
type
yankeee imperial plunder 
                  with 
the day to day  gray mask
one wears
to do bizness

i doubt it 
as much as the fanzene leftoids may fondly hope and pray

hitler ain't even on the horizon

nor the kaiser 
nor hirohito 
nor  czarina katherine 
 nor carthage nor sparta 
nor the hyksos nor the monguls nor the  ... 
              at least   
           not yet pard ---------------------


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