Thu 13 Mar 2008
Submitted by YOUR NEW REALITY
Who Will Bail Out The United States This Time?
An unceasing series of headlines flow on the decimation of the American Dollar, and the destruction of the US economy :
US Home Foreclosures Soar 60% In 12 Months
US Dollar Falls To 12 Year Low Against Yen, New Record Low Against Euro
What Happens When People Can’t Afford To Drive To Work? Oil Hits $110 A Barrel
Paul Craig Roberts spells out the rest, and asks the most important but as yet mostly unasked question :
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Crude oil for April delivery hit $110 per barrel. The US dollar fell to a new low against the Euro. It now takes $1.55 to purchase one Euro.
These new highs against the dollar are the ongoing story of the collapse of the US dollar as world reserve currency and corresponding collapse of American power.
Each new decision from the insane Bush regime pushes the dollar a little further along to oblivion. The same Fed announcement that boosted the stock market on March 11 sent the dollar reeling and the price of oil up. The Fed’s announcement that it and other central banks are going to deal with the derivative crisis by monetizing $200 billion of the troubled instruments signaled more dollar inflation.
Here is the picture: The US economy, which has been kept alive by enormous debt expansion that has over-reached its limit, is falling into recession. The traditional way out by expanding the supply of money and credit is blocked by the impaired banking system, the levels of consumer debt, the collapsing value of the US dollar, and rising inflation.
The Bush regime is attempting to bypass the stalled credit expansion by sending Americans $600 checks, money that will mainly be used to reduce existing credit card debt and not to fund new consumption.
The US is dependent on foreigners not only for energy but also for manufactured goods and advanced technology products. The US is dependent on foreigners to finance our consumption of $800 billion annually more than the US produces. The US is dependent on foreigners to finance its red ink wars, and the US government’s budget deficit is now expanding as tax revenues decline with the declining economy.
The bottom line: US power is enfeebled. US power depends on the willingness of foreigners to finance our wars and on the willingness of foreigners to continue to accumulate depreciating dollar assets.
The US cannot close its budget deficit while it is squandering vast sums on wars that serve no US purpose, handing out $150 billion in red ink rebates, and falling into recession.
The US is overextended economically and militarily, just as was Great Britain with the fall of France in the opening days of World War II. The British had the Americans to bail them out.
After the chewing gum and bailing wire patch-ups are exhausted, who is going to bail us out?
Saudi Arabia?
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