Fórum da Saco Invest
HomeHome  FAQFAQ  SearchSearch  RegisterRegister  MemberlistMemberlist  UsergroupsUsergroups  Log in  

Share | 

 Sinking Currency, Sinking Country

Go down 

Number of posts : 440
Registration date : 2007-07-01

PostSubject: Sinking Currency, Sinking Country   Tue Nov 06, 2007 8:25 pm

Pat Buchanan

Sinking Currency, Sinking Country
Fri Nov 2, 3:00 AM ET

The euro, worth 83 cents in the early George W. Bush years, is at $1.45.

The British pound is back up over $2, the highest level since the
Carter era. The Canadian dollar, which used to be worth 65 cents, is
worth more than the U.S. dollar for the first time in half a century.

Oil is over $90 a barrel. Gold, down to $260 an ounce not so long ago, has hit $800.

Have gold, silver, oil, the euro, the pound and the Canadian dollar all suddenly soared in value in just a few years?

Nope. The dollar has plummeted in value, more so in Bush's term than
during any comparable period of U.S. history. Indeed, Bush is presiding
over a worldwide abandonment of the American dollar.

Is it all Bush's fault? Nope.

The dollar is plunging because America has been living beyond her
means, borrowing $2 billion a day from foreign nations to maintain her
standard of living and to sustain the American Imperium.

The prime suspect in the death of the dollar is the massive trade
deficits America has run up, some $5 trillion in total since the
passage of NAFTA and the creation of the World Trade Organization in

In 2006, that U.S. trade deficit hit $764 billion. The current account
deficit, which includes the trade deficit, plus the net outflow of
interest, dividends, capital gains and foreign aid, hit $857 billion,
6.5 percent of GDP. As some of us have been writing for years, such
deficits are unsustainable and must lead to a decline of the dollar.

A sinking dollar means a poorer nation, and a sinking currency has
historically been the mark of a sinking country. And a superpower with
a sinking currency is a contradiction in terms.

What does this mean for America and Americans?

As nations realize that the dollars they are being paid for their
products cannot buy in the world markets what they once did, they will
demand more dollars for those goods. This will mean rising prices for
the imports on which America has become more dependent than we have
been since before the Civil War.

U.S. tourists traveling to the countries whence their ancestors came
will find that the money they saved up does not go as far as they

U.S. soldiers stationed overseas will find the cost of rent, gasoline,
food, clothing and dining out takes larger and larger bites out of
their paychecks. The people those U.S. soldiers defend will be
demanding more and more of their money.

U.S. diplomats stationed overseas, students and businessmen are already facing tougher times.

U.S. foreign aid does not go as far as it did. And there is an element
of comedy in seeing the United States going to Beijing to borrow
dollars, thus putting our children deeper in debt, to send still more
foreign aid to African despots who routinely vote the Chinese line at
the United Nations.

The Chinese, whose currency is tied to the dollar, and Japan will
continue, as long as they can, to keep their currencies low against the
dollar. For the Asians think long term, and their goals are strategic.

China — growing at 10 percent a year for two decades and now growing at
close to 12 percent — is willing to take losses in the value of the
dollars it holds to keep the U.S. technology, factories and jobs
pouring in, as their exports capture America's markets from U.S.
The Japanese will take some loss in the value of their dollar
hoard to take down Chrysler, Ford and GM, and capture the U.S. auto
market as they captured our TV, camera and computer chip markets.

Asians understand that what is important is not who consumes the apples, but who owns the orchard.
Other nations that have kept cash reserves in U.S. Treasury
bonds and T-bills are watching the value of these assets sink. Not
fools, they will begin, as many already have, to divest and diversify,
taking in fewer dollars and more euros and yen. As more nations abandon
the dollar, its decline will continue.
The oil-producing and exporting nations, with trade surpluses,
like China, have also begun to take the stash of dollars they have and
stuff them into sovereign wealth funds, and use these immense and
growing funds to buy up real assets in the United States — investment
banks and American companies.
Nor is there any end in sight to the sinking of the dollar.
For, as foreigners demand more dollars for the oil and goods they sell
us, the trade deficit will not fall. And as the U.S. government prints
more and more dollars to cover the budget deficits that stretch out —
with the coming retirement of the baby boomers — all the way to the
horizon, the value of the dollar will fall. And as Ben Bernanke at the
Fed tries to keep interest rates low, to keep the U.S. economy from
sputtering out in the credit crunch, the value of the dollar will fall.

The chickens of free trade are coming home to roost.
To find out more about Patrick Buchanan, and read features by
other Creators Syndicate writers and cartoonists, visit the Creators
Syndicate web page at

Back to top Go down
View user profile
Sinking Currency, Sinking Country
Back to top 
Page 1 of 1

Permissions in this forum:You cannot reply to topics in this forum
Jump to: