A Dollar the Size of a Postage Stamp

http://counterpunch.com/whitney11272007.html


Even Larry Summers Predicts Doom


Lately it seems as though everyone wants to take a poke at the dollar. Last week, it was the Brazilian supermodel who demanded euros for her jaunts on the catwalk instead of USD. The week before that, hip-hop impresario, Jay-Z, released a video dissin' the dollar and praising the euro as the 'baddest Dude in the 'hood'.

Lambasting the greenback has become trendy. It's a favorite pastime of politicians, too. At the November OPEC meeting in Riyadh, Iran's president Mahmoud Ahmadinejad asked the assembled finance ministers to "study the feasibility of selling oil in another currency." Ahmadinejad disparaged the dollar as "a worthless piece of paper".

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Central banks across the globe are trying to figure out how to ditch their dollar reserves without triggering a stampede for the exits. No one wants to see that. But, then, nobody wants to be stuck with vaults full of Uncle Sam's green confetti either. So, the question arises; What is the best way to divest oneself of $5.6 trillion (total USD held overseas) before the Lusitania capsizes?

Kuwait, Venezuela, Iran, Russia, and Norway have already opted to ignore the destabilizing effects of "conversion" from dollars and are in some stage of divestiture. Others will follow. The UAE, Bahrain, Qatar, Oman and Saudi Arabia are considering switching from the dollar-peg to a basket of currencies so they can hedge against the inflation that's battering their economies. It's only a matter of time before the Petrodollar System---which links the dollar to petroleum sales and creates a de facto "international currency"---unravels completely, precipitating the final collapse of Breton Woods.

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The stock market lost another 237 points yesterday; the third 200-plus slide in a week. Now all three indexes are down more than 10% since their record high on Oct 9. Treasury yields are plunging as investors flee the stock market looking for safety. That means the Fed will have to slash rates again at its December 11 meeting to provide more low interest crack for the investor class. Traders see an 82% chance that Bernanke will cut the Fed Fund's rate by another quarter point to 4.25%. All that is likely to do is put the dollar into free fall and send food, oil and gold prices to the moon. It won't pay off the overdue mortgage payments and it won't remove the billions of dollars of debt from the banks' balance sheets. It's pointless. The US is headed for a "hard landing" and its dragging the rest of the world along with it.
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america isn't crumbling, its evaporating right before our eyes

It is deflating like a leaky balloon. Let's keep our terms correct. :hi:

:)

:toast:

Let the market shake itself out without injecting more money into the equation. It's just going to pile more inflation on top of a working class with stagnant wages that don't keep up with inflation.