What’s Left of the Dollar?
An editorial appearing in the political newsletter, Counter Punch, takes a jab at the declining dollar and takes a look at the trouble that its decline will bring. Here is an excerpt from that editorial:
- More than two-thirds of all sovereign foreign exchange holdings are denominated in dollars. When those dollars are converted back into foreign currencies and start recycling into the US; we’re in deep trouble. Inflation will soar. Surely, the Fed must have known this day would come when they were pumping trillions of dollars into subprime mortgages and complex debt-instruments which served no earthly purpose except to fatten the bottom line for rapacious bankers and hedge-fund managers. The Fed also knew that the nation’s wealth was not being “efficiently deployed” for capital improvements on factories, technology or industry. Instead, the money was shoveled into the bottomless sinkhole of stucco homes with composition roofing and toxic credit default swaps.
- 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. The US is headed for a “hard landing” and its dragging the rest of the world along with it.
Perhaps this editorial is harsher than it needs to be. The blame can’t all be put on the Federal Reserve and the government, they aren’t the one struggling to pay off mortgage debt. Despite the cynicism and pessimism, there are many good points in this article. The U.S. economy really is in trouble unless we can keep the dollar from falling any further. It’s time we all face the facts and try to find a solution for the financial mess we are now in.
November 29, 2007 | Filed Under Pay Off Mortgage
Comments
Leave a Reply
You must be logged in to post a comment.