James Turk at goldmoney.com points out that throughout history people living in a country whose currency is dying are the last in the world to know. I suppose it's like the husband who is the last to know his wife is cheating on him. What's obvious to everyone else is impossible to imagine for the cuckold.
It is impossible for Americans to see that their currency, the U.S. dollar, is going the way of the Continental. Remember the Continental?
Wiki entry for Continental:
"The Continental currency was a paper currency issued by several American Colonies, as well as by the Continental Congress, after the Revolutionary War began in 1775. The currency was denominated in both pounds, shillings and pence, and dollars. With no solid backing and being easily counterfeited, the continentals quickly lost their value, giving voice to the phrase "not worth a continental". The painful experience of the runaway inflation and collapse of the Continental dollar prompted the delegates to the Constitutional Convention to include the gold and silver clause into the United States Constitution so that the states could not issue bills of credit, or anything that is not gold or silver."
The story of the dollar today is the sequel to the Continental and the rest of world is performing financial euthanasia by gently putting the greenback to sleep - by gradually switching their reserve currencies out of dollars and into European and Asian currencies and gold.
The dollar's death can be compared to a retelling of Tolstoy's, "The Death of Ivan Illiach." The world speaks openly about the benefits it will accrue now that the dollar is going the way of all flesh. They buy Swiss Francs, Singapore dollars and stocks and bonds priced in various non-dollar currencies and they're not shy about broadcasting the truth about the dollar's death right to the dollar's face. The American people, like Ivan lying in their coffin, finally 'get it' but it's too late; they're dead. America goes off line, not with a bang, but a whimper and the rest of the world says, 'good riddance.'
Alan Greenspan, the Ayn Rand loving currency assassin, once bragged during the go-go 1980's that the American economy, as measured by the weight of cargo going out of the country was becoming 'lighter.' Who needs manufacturing, right? This weightlessness he reasoned was proof of the 'New Economy.' There was growth without inflation because of a new economic paradigm shifting America to a new permanent state of electronic Goldilocks. Looking back, we see that the blinkered ex-Chairman never factored into his delusion - the missing inflation numbers; the ghost in the machine was a shift of high priced work hours from America to China.
Gspan's new paradigm would have continued if cheap (read: slave) wages in China stayed in the sub-50 cent per hour range allowing Wal-Mart to continue offering; 'Every Day Low Prices That Save You $1 at the Cash Register But Cost You $2 In Pay.' But starting last summer, when interest rates began moving higher - after wages in China and India bottomed - the unbearable lightness of America's Zeppelin economy found a lead lining and started to sink - taking with it the U.S. dollar, the illusion of cheap imports, and high productivity gains (in reality, just Chinese slaves sewing American flags for pennies a day).
Digression and Rhetorical Foreshadowing Alert: One of the lies U.S. government statisticians tell Americans is that Europeans are less productive. In fact, Europeans are equally, and in many cases more productive than the average American worker. The difference is that Europeans invest their productivity gains into time off while Americans invest their gains in consumption.
Getting back to Gspan's nightmare, his Philosopher's bong-pipe smoking FOMC (Fed Open Market Committee) circle jerks thought that copper, lead, zinc, oil, gold, corn, wheat, rice, coffee and milk were never going to rise in price ever again. Now we've all got the munchies, but nobody can afford beer or pretzels.
The zombies and shills on CNBC and Fox Business News keep jabbering away trying to inflate Gspan's busted new paradigm lead balloon with the force of their own hyperbole even while it gets pricked with rumors and negative bets from titanic currency speculators and spiteful Sovereign Wealth Funds. James Cramer can blow only so much hot air.
Greenspan wrongly thought that 'financial services' could permanently replace manufacturing in America. Imagine a nation of 100 million stock brokers trying to sell stocks and bonds to each other; i.e., Atlanta Georgia times 10,000 (before the recent collapse).
Now that the value of financial services are collapsing along with the dollar, Americans are being asked to step up to the plate and forget all about financial services. The Fed's got a new idea; manufactured synthetic financial memories. Bernanke says inflation is not really a problem. He says the problem is people's expectation of inflation. To fix the economy people have to remember a time when inflation wasn't such a big problem and then inflation will go away - even though Goldilocks has been replaced with Charles Bukowski - and is lying in the gutter too drunk to remember his own name - much less $20 a barrel oil.
Americans think their financial collapse is going to take the whole world down with them. No way. Aside from the world benefiting from a bankrupt America that can no longer bomb people for sport and oil, the other major benefit of an evaporated U.S. is the removal of the globe's no. 1 waste producer. The U.S. has only 4.5% of the world's population yet generates 25% of its garbage. And Americans themselves might benefit too. As the price of food skyrockets America's obesity problems should dissipate. Greenspan will write a new book; "From Turbulence to Starvation: Lose Weight and Money at the Same Time."
The rest of world (the parts of it the U.S. isn't bombing-for-dollars) doesn't see any risk in a collapsed U.S. America as the brand that is America just isn't cool any more. As an ideology, American style democracy faded as a world leading beacon along with Katrina and the Abu Ghraib photos. Add to the mix preemptive wars, expanded death penalties, NSA, FBI, CIA, wire tapping, and rigged elections.
No, the Europeans are not worried. Take the Finns for example. Typical of their high productivity European counterparts they live in a huge economic zone with a strong currency, less unemployment than the U.S. (as pointed out in a recent HuffPost Blog, America's Government Lies -- Adjusted unemployment number is 12% not 5.1%), and enjoy a higher quality of life, and higher human and civil rights too. But there is never enough of a good thing, so the Finns are looking to pass a new law that gives couples a paid week off per year to shag.
Posted April 18, 2008 | 08:11 AM (EST)