Thread: Velkommen to Banktopia ~ Dollar Getting Hammered

Velkommen to Banktopia

Politics / Credit Crisis 2011
Apr 24, 2011 - 08:03 AM

By: Mike_Whitney

Let's talk turkey. The dollar is getting hammered by the day. And the dollar is getting hammered by design, because the Fed wants a weaker currency to boost exports and lower the real burden of debt on the banks. (Yes, Martha, the banks are still insolvent) So, down goes the greenback, lower and lower, pushing up gas and food prices while the buying power of the average US worker vanishes down the plughole. And this process will continue for the foreseeable future because--as Obama stated earlier in the year--Washington is committed to "doubling exports in the next 5 years." Think about that: "the next 5 years". That's the same as saying that the American worker will be reduced to third-world poverty in a half decade or so. It's a death sentence.

And none of this has anything to do with lowering unemployment or raising GDP. In fact, the revisions of first quarter GDP reveal the lies behind the policy. The first announcement from the Commerce Department put GDP at 3.2%. Remember that? Now we've slipped to 1.4% and some predict the final revision could actually show negative growth. This is from the New York Times:

"Earlier this week we wrote that several prominent economic forecasters had lowered their estimates of gross domestic product growth in the first quarter of this year. Today saw even further declines. Macroeconomic Advisers, a forecasting firm, lowered its estimate to just 1.4 percent annualized, when just a few months ago they had pegged the number at 4.1 percent.

Capital Economics likewise brought its estimate down to 1 percent, writing in a client note:

Every data release last week seemed to necessitate a further downward revision to our first-quarter GDP growth forecast. By the end of the week when the dust had finally settled, that estimate was down to only 1% at an annualized pace. Indeed, there is now even a decent outside chance that the economy contracted outright." ("G.D.P. Estimates Slide Further", New York Times)

So, it's all baloney. The economy isn't growing. How could it be? Wages are flat, credit is still shrinking, (excluding student loans) and the only reason the unemployment numbers keep dropping is because more and more people are falling off the unemployment rolls. Everyone knows that. So, while there may be a slight uptick in consumption and retail; don't be fooled. It's just because it costs more to put food on the table or drive to work, not because people are scarfing up trinkets at the mall or living the highlife.

And the American people know what's going; they can see through this "green shoots" charade. That's why the latest survey from the New York Times showed that the "Nation’s Mood (is) at the Lowest Level in Two Years" and that "Americans are more pessimistic about the nation’s economic outlook and overall direction than they have been at any time since President Obama’s first two months in office when the country was still officially ensnared in the Great Recession." ("Nation’s Mood at Lowest Level in Two Years, Poll Shows, New York Times)

People have lost faith in Obama, the congress, and the political process itself. They can see that the system is broken and no longer responds to the will of the people, which is why they're throwing up their hands and giving up. It's obvious. Gallup found the same thing. Here's a clip from their recent poll:

"Americans' optimism about the future direction of the U.S. economy plunged in March for the second month in a row, as the percentage of Americans saying the economy is "getting better" fell to 33% -- down from 41% in January....Optimism about the future of the economy declined across all political parties during the first quarter....Gallup's Economic Confidence Index, which includes the economic optimism measure, also plunged in March..." ("U.S. Economic Optimism Plummets in March", Gallup)

So, all the "happy-times" propaganda has had zilch effect. The public's not buying it. They know we're in a Depression. How could they not know? They're underwater on their mortgages, they can't get a loan, their kids and Uncle Arnie can't find work, and the guy in the Oval Office won't do a damn thing to help out. Is it any wonder why so many people are giving up on capitalism entirely. Just take a look at this survey from Globescan for a real shocker:

"American public support for the free market economy has dropped sharply in the past year, and is now lower than in China, according to a GlobeScan poll released today.....When GlobeScan began tracking views in 2002, four in five Americans (80%) saw the free market as the best economic system for the future—the highest level of support among tracking countries. Support started to fall away in the following years and recovered slightly after the financial crisis in 2007/8, but has plummeted since 2009, falling 15 points in a year so that fewer than three in five (59%) now see free market capitalism as the best system for the future.

GlobeScan Chairman Doug Miller commented: “America is the last place we would have expected to see such a sharp drop in trust in the free enterprise system. This is not good news for business.â€

Good read, thank you for posting.