Hi
Anyway, read on, nettimers, and contemplate the end of the world as
we know it. Or at least get out while you can.
Keith Hart
Below, a very strong analysis by Loren Goldner of the newly discovered
- but clearly rather well established - dollar crisis.
if he's right, it doesnt sound like those who will be most affected
will have the option of getting out.
Ben Seymour
http://home.earthlink.net/%7Elrgoldner/dollarcrisis.html
The Dollar Crisis, and Us
By Loren Goldner
Incredible as it may sound, ever since the late 1950's, the world
economy has been tossing around a hot potato of an ever-increasing
mass of nomad dollars (dollars held outside the U.S.) whose actual
conversion into tangible wealth would plunge the world into a
deflationary crash. Even now, few people are aware of the extent to
which this technical question of economics (and in reality a
profoundly social question) has in fact cadenced 45 years of world
history, erupting into view in key years such as 1968 (dollar
convertibility crisis), 1973 (end of the Bretton Woods System), 1979
(runaway global inflation, gold at $850 an ounce) 1990 (Japanese
deflation) or 1997-98 (Asia crisis, Russian default, hedge fund
crisis). We are clearly today at another key turning point, and perhaps
(over the next few years) at the long-delayed culmination of the whole
story, when that mass of dollars, now grown to gargantuan proportions
(the $30 billion of 1958 have become at least $11 trillion today) will
be deflated, one way or another.
With the election safely behind it, the Bush administration in the
U.S. can now get on with the world economic crisis that has been
stalking it ever since it came to power, in the wake of the stock market
crash of spring 2000. Bush and his people must move as quickly as
possible to get the worst over with, in their own terms (terms
distorted by their own illusions of being in control of events).before
they have to face new elections or other political challenges. (Had
Kerry won, his incoming government might well be facing a worse
crisis, compounded by international uncertainty over various
policies.) In recent weeks, the dollar crisis, which is merely
the immediate visible face of a profound social and economic crisis in
progress for decades, has moved (once again) from technical discussions
of a marginal coterie of specialists to center stage in the media.
Prominent pro-capitalist economists such as Steve Roach and Paul
Krugman are now saying that a major crisis is almost inevitable, more a
question of when than if. This is particularly revealing in light of
the fact that in eight or nine months of almost constant media huffing
and puffing about the election, this reality and the issues it raises
were precisely nowhere in the discussion. Ever since the 1960's, when
the problematic international status of the dollar became an ongoing
policy question (with its ebbs and flows) no mainstream American
politician has ever gone anywhere near it. It is more of a political
third rail than Social Security or Medicare (1)
Unfortunately, the same thing can be said, with some honorable
exceptions, about the radical left.in the U.S.
A capitalist crisis like the current one resembles a poker game where
the table is swept clean and all cards and chips must be redistributed
for the game to continue at all. This could happen as an orderly
bankruptcy proceeding but it will most likely happen (as it has always
happened in the past) chaotically, through economic blowout, class
confrontation, and war. (Only the latter options create the momentum
and the constituency for the necessary changes.) This crisis will in
all likelihood not come in a pure, 1929-style form of abrupt
deflation, stock market crash, and sudden mass unemployment (though some
combination of these is a distinct possibility). What somehow has to
happen, from a capitalist point of view, is a serious devaluation of the
approximately $11 trillion dollars currently held by foreigners, and a
simultaneous adjustment of major currencies to reflect new world
economic realities. The dollar must be dethroned from its global reserve
currency status (about 63% of all central bank reserves are currently
denominated in dollars, down from 69% a year ago), or reduced to one
among many alongside the euro, the yen, or possibly some basket of
major currencies. The U.S. must stop running $600 billion in annual
balance-of-payments deficits, drawing in 80% of the world's savings to
finance them. It must deflate the approximately (outstanding) $33
trillion of Federal, state, municipal, corporate and personal debt (3
times the dubious GDP figure) that has kept the economy going for
decades. This will entail, among other things, a collapse of the huge
mortgage bubble and the subsequent bankruptcy of untold millions of
families and individuals. The U.S. must figure out a way to balance
imports and exports, which, given the vast hollowing out of U.S.
industry over the past 35 years,
