It's here. The house of cards is falling in slow motion......

http://www.wsws.org/articles/2008/dec2008/doll-d19.shtml

Dollar plunges after record rate cut by US Federal Reserve


Nouriel Roubini of the Stern School of Business at New York University summed up the Fed’s actions as follows: “Traditionally, central banks have been the lenders of last resort, but now they are becoming the lenders of first and only resort. As banks curtail lending to each other, to other financial institutions and to the corporate sector, central banks are becoming the only lenders around.


“Likewise, with household consumption and business investment collapsing, governments will soon become the spenders of first and only resort, stimulating demand and rescuing banks, firms and households. The long-term consequences of the resulting surge in fiscal deficits are serious.”

The Fed’s massive injection of liquidity into the financial markets does not address the underlying causes of this downward spiral. The crisis is not one of liquidity, but of solvency. Decades of rampant speculation and outright fraud based on cheap credit and an expansion of debt, facilitated by government deregulation of the banks and financial markets, have produced a vast edifice of paper values that is now collapsing.


There is a general erosion of confidence in the credit markets. The basic problem is not the cost of credit, but the fact that banks and other financial institutions refuse to lend to one another, to other businesses and to consumers because they have no confidence in the financial viability of prospective clients.


At the heart of this crisis is the internal decay of American capitalism, marked above all by the dismantling of large sections of its manufacturing base, and the decline in its global economic position. A longstanding crisis of profitability in industry has led to a separation of wealth accumulation by the financial elite from the productive process and a massive growth of financial parasitism. There is no genuine solution to this crisis within the framework of the capitalist market system—only ever more brutal attacks on the jobs and living standards of the working class, combined with a growth of militarism and war.

us SHIT

We're fucked ... big time. The Japanese economy just ain't that strong right now.

as comparred to what it was last summer. it's around 1.38 now. Last summer it was over 1.50

I think even the braindead governors on the Fed Board knew this was going to happen.
GAC

A separation of wealth by the financial elite from the productive class.

The productive class - the workers - have no extra money. Therefore they spend no extra money, like they were doing just 2 years ago. That stopped growth in the economy. In an economy predicated on always growing or die, it is dieing.

It was nice while it lasted?