It seems to me that there’s some degree of ventriloquism involved here. The ‘death rattle’ of the Euro is really the death rattle of the dollar. It’s all linked. We go down, (and) they go down first. Capitalism is the global economy. It amounts to what communists and Islamists have been screaming about all along: American imperialism.
It all suddenly hangs in the balance. If the dollar fails, capitalism has failed. Standing in the wings, ready to take over, are communism or shariah. We say capitalism equals freedom when, in truth, it’s just another ‘ism’ like any other, and (communists and Islamists believe) totally interchangeable.
Link our political reality to the implosion of capitalism and, again, you see failure all down the line. The only alternative that remains is communism and (to a lesser extent) shariah. These will fight it out in due time. As for now, these are joined at the hip in their effort to destroy the West - or, at the very least, enjoy watching as the West destroys itself.
http://pkoelliker.blogspot.com/
Posts
The dollar is destined for devaluation, but perhaps not yet.
ReplyDeleteThe EU is in a trap worse than ours. Their banks are probably more vulnerable than ours -- their leverage was even more insane than the leverage at US bank bailout basket cases. The European Central Bank backed a bailout plan, but failures of sovereigns will soon overwhelm the fund, and Germans in particular are making noises about not bailing out any more bondholders. There will be haircuts, and maybe buzz cuts. The Eurozone is an artificial marriage of cats and dogs, something that cannot work long term, any more than a marriage of US (consumers, debt accumulators) and China (exporters, capital accumulators) could work forever.
Japan is facing demographic disaster, which equals economic decline, with barely more than one child per couple, and projections of average age increasing to 60 in a few decades. Their total debt is worse than the USA.
In the United States, we have similar problems, but of lesser degree. In the kingdom of the blind, the one eyed man is king. Or, to put it another way, in the world of economic lepers, we are the leper with the most remaining fingers. Did I hear that analogy on the Batchelor show?
Plus the fact that a few weeks ago over 90% of the sentiment was against the dollar -- this sounds suspiciously like a bubble in dollar pessimism, one that a smart contrarian trader would have taken advantage of by becoming a dollar bull. Yes, all fiat currencies are doomed, but the path downward is never a straight line.