The Political Junkies
archived: 7 - 13 May, 2006 Back Next
Updated: May 11, 2006
DEVALUING THE DOLLAR
As Allen L. Roland’s article, below, from earlier this week denotes, Bush continues to pursue the policy of permitting the US DOLLAR to devalue on the international markets. He is attempting to stop America’s ever increasing balance of trade deficit.
This chart graphically demonstrates what is happening:
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The near record deficit pushed the US DOLLAR down again.
``With policymakers in Washington concerned about the 'sustainability' of the U.S. trade balance, this number will just add to the bearish sentiment toward the dollar,'' wrote JPMorgan currency analysts . . . . -- Money
True to JPMorgan’s predictions, the dollar is continuing its fall:
The U.S. dollar is having a
sinking spell . . . . Spurring the greenback's slide are recent statements by
top economic policymakers, notably declarations about the need to reduce global
trade imbalances.
The dollar has suffered sharp losses against other currencies the past two
weeks, and yesterday it hit a fresh, seven-month low against the Japanese yen.
Although it rallied yesterday afternoon against the euro, it fell to an 11-month
low against the European currency earlier in the day and is down nearly 6
percent against the euro since late February.
The effect? First, you will pay more for goods imported from overseas, including oil. Second, the US Dollar is losing its status as the world’s preferred currency.
They may be telling a different story to money markets, but Asian central banks have been quietly switching their dollar holdings to regional currencies for at least three years, confirm global banking data. In a further, and so far the biggest, setback for the greenback's status as the undisputed reserve currency, Japan on Thursday said it might diversify its holdings, though monetary chiefs later sought to play down the prospect. – Asia Times
Part of the problem is that America is buying record amounts of goods from China. Republicans claim it is free trade. In reality, it is not free trade at all. China does not let its currency float on the free market but artificially fixes the price of its currency to the US Dollar and lets it move up or down slightly with the markets.
Bush has talked “tough” about dealing with the Chinese currency issue. While the talk has been “tough,” Bush fails to take the steps to actually address the problem. This week:
The U.S. Treasury declined to
brand China a manipulator of its currency, risking a clash with lawmakers who
say an undervalued yuan is inflating the U.S. trade deficit and costing factory
jobs.
China has made ``far too little progress'' in making its exchange rate more
flexible, the Treasury said in its semiannual report on the currency policies of
U.S. trade partners. Still, steps China has taken since a July revaluation and
its promises to do more suggest the nation isn't deliberately seeking an unfair
trade advantage, it said.
Treasury Secretary John Snow has sought to coax China into loosening its grip on
the yuan while avoiding a confrontation with the world's fastest-growing major
economy. Snow is also trying to blunt protectionist sentiment in Congress, where
more than a dozen proposals seek to punish China for its economic policies. .
. .
Overseas sales helped China's economy double in size in the past decade and
vault ahead of the U.K. to become the world's fourth largest. The U.S. trade
deficit with China jumped to a record $201.6 billion last year, eliciting calls
for penalties from lawmakers who say the government keeps the yuan artificially
weak to spur exports.
``I'm very disappointed that once again the Bush administration has failed to
cite China as a currency manipulator,'' said Charles Schumer, Democrat from New
York. ``Clearly China is intervening in the market,'' he said. ``There's no
other explanation.''
Democrats should be making these points:
Bush is the first US President not to defend the US Dollar against other currencies.
The US Dollar is losing its preeminence as the world’s preferred currency.
Bush is, in effect, devaluing the US Dollar.
Bush’s weak US Dollar means you are paying more for gas, clothes and every other item people buy from oversees.
Gas and energy prices are going even higher.
Bush’s weak US Dollar is leading to higher interest rates at home.
Higher prices for the goods we buy and paying more in interest on loans – that is Bush economic policy.
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UPDATED: May 9, 2006
ENDGAME
Iranian President Mahmoud Ahmadinejad has, on more than one occasion, been quoted as threatening to wipe Israel form the face of the earth. Juan Cole, Informed Consent, translating Ahmadinejad’s speech from the original language has convincingly made the case that Ahmadinejad statement never threatened military action against Israel.
One would assume that the intelligence services of any respected nation would reach the same conclusion as Prof. Cole. Yet, Israel is ratcheting up the stakes:
Vice Premier Shimon Peres said Monday that "the president of Iran should remember that Iran can also be wiped off the map."
"Teheran is making a mockery of the international community's efforts to solve the crisis surrounding Iran's nuclear program," Peres told Reuters, adding that "Iran presents a danger to the entire world, not just to us."
[For a Jerusalem Online video of events click here]
Peres's vehement expressions came the same day that Iranian President Mahmoud Ahmadinejad wrote to US President George W. Bush proposing "new solutions" to their differences in the first letter from an Iranian leader to an American president in 27 years, Iranian government spokesman Gholam-Hossein Elham said Monday.
Prof. Cole opines:
What is really
going on here is an old trick of the warmongers. Which is that you equate
hurtful statements of your enemy with an actual military threat, and make a weak
and vulnerable enemy look like a strong, menacing foe. Then no one can complain
when you pounce on the enemy and reduce his country to flames and rubble.
It is obvious that powerful political forces in Washington are fishing for a
pretext to launch a war on Iran, and that they are just delighted to
have Ahmadinejad as cartoon villain and pretext.
Certainly, the stakes in dealing with Iran’s development of nuclear energy are rising. What is the endgame?
Junkie Editor Michael Carmichael authors a major analysis in his section of TPJ today that connects the dots to a nightmarish endgame. Bush informed Americans that in his opinion the passengers on United Flight 93 struck the first counter attack to World War III. Carmichael makes the case that Bush and the neoconservatives are about to strike at the endgame in this new world war. It is a must read.
REQUIEM FOR THE DOLLAR
[Authored by Allen L Roland*]
The dollar has lost 5% against the euro since April and is quickly headed south. The Iran bourse could be the final jolt that pushes the greenback over the edge.-- Mike Whitney
Iran's oil bourse opens within two weeks and that alone is driving the gathering storm of Cheney/Bush antagonism towards Iran. The nuclear question pales when compared to the financial havoc of an Iranian euro based oil bourse.
The last Middle East country that did that was Iraq in late 2002 and we invaded six months later. The first thing the Cheney/Bush administration did was restore Iraq's oil trade to dollars.
The U.S. dollar is sinking fast and Mike Whitney, ICH, explains why:
Currently, the national debt is a whopping $8.4 trillion with an equally harrowing $800 billion trade deficit. (7% of GDP) The ever-increasing demand for the greenback in the oil trade is the only thing that has kept the dollar from freefalling to earth. Even a small conversion to euros will erode the dollar’s value and could precipitate a sell-off.
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SOURCE MATERIAL:
Mike Whitney,
THE LAST GASP OF THE DOLLAR?
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*Allen L. Roland served five years as a Navy fighter pilot and ten years as a stockbroker. He has earned a masters degree in psychology and now works as a therapist with an active private counseling practice in the San Francisco Bay Area.
Roland has a wonderful website, Allen L. Roland's Radio Weblog. He also publishes a newsletter that is TPJ recommended. You may subscribe here: Newsletter
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A SACK & WAR
Local elections in England this past week dealt Blair’s Labour government a strong, but not fatal, defeat. As a result, Blair has reshuffled his cabinet with a number of his ministers being “sacked,” the English euphemism for being fired.
Jack Straw, Blair’s Foreign Minister who oversaw England’s role in the “coalition of the willing,” was one of the ministers “sacked” by Blair. Straw’s departure was a surprise to most political observers in England, perhaps not the least of which was Straw himself.
Blair’s sacking may signal that Bush is proceeding to attack Iran and that Blair remains a committed partner in the coalition of two. In recent months, Straw publicly advocated, as a matter of policy and law, that war with Iran was ill advised. Earlier this month, Straw announced Brittan’s opposition to a preemptive war in Iran with undiplomatically direct language:
Jack Straw, the Foreign Secretary, has dismissed reports of a possible United States nuclear strike against Iran as "completely nuts".
He was commenting on an article in tomorrow's New Yorker magazine, trailed in the Sunday Telegraph, claiming that the US has drawn up secret plans to attack facilities in Iran if necessary. . . .
Mr Straw - who has said that military action against Iran is "inconceivable" - added: "I have made clear the British Government's position on this time and time again which is widely shared across Europe. . . .
Mr Straw, speaking on BBC1's Sunday AM Programme, stressed that the UK would not launch a pre-emptive strike on Iran, adding that he was as "certain as he could be" that neither would the US.
There was "no smoking gun" and therefore no justification for military action, he said.
There is a growing conviction among members of the United States military, and in the international community, that President Bush’s ultimate goal in the nuclear confrontation with Iran is regime change. Iran’s President, Mahmoud Ahmadinejad, has challenged the reality of the Holocaust and said that Israel must be “wiped off the map.” Bush and others in the White House view him as a potential Adolf Hitler, a former senior intelligence official said. “That’s the name they’re using. They say, ‘Will Iran get a strategic weapon and threaten another world war?’ ”
A government consultant with close ties to the civilian leadership in the Pentagon said that Bush was “absolutely convinced that Iran is going to get the bomb” if it is not stopped. He said that the President believes that he must do “what no Democrat or Republican, if elected in the future, would have the courage to do,” and “that saving Iran is going to be his legacy.”
Straw made other statements that obviously did not sit well with the Bush administration and with which Prime Minister Blair obviously disagreed:
Straw said there were also "anxieties, which we have to acknowledge, as to whether the strategy which the European Three are following with the backing of the United States is going to lead to the possibility of "another Iraq."
"So that's why it takes time."
But, he insisted: "As to the possibility of this being 'another Iraq,' it won't.
"I don't regard military action as appropriate or indeed conceivable."
Blair refuted Straw publicly, refusing to exclude the possibility of war:
Prime Minister Tony Blair said on Feb. 7 he could not rule out the possibility of taking military action against Iran over its nuclear programs.
During questioning by a committee of senior parliamentarians, Blair said that while military action was "not on the agenda," he could "never say never."
Senior Foreign Office officials also appear keen to preserve the military option. A government memo reported by the Times of London last week suggested that Britain was pressing for a U.N. resolution that would pave the way for sanctions or possible force against Iran should it fail to halt its nuclear program.
The letter detailed a strategy to persuade Russia and China to back a Chapter VII resolution that would require the United Nations to act should Tehran refuse to comply.
Despite the insistence of the foreign secretary just three days earlier that military action was "inconceivable," the letter, written by Foreign Office Political Director John Sawyers on March 16, recommended "more serious measures."
"(The Iranians) will need to know that more serious measures are likely," Sawyers wrote to his U.S., German and French counterparts. "This means putting the Iran dossier on to a Chapter VII basis."
He suggested making a suspension of all uranium enrichment by Tehran "a mandatory requirement of the Security Council, in a resolution we would aim to adopt, I say, early May."
Straw’s failure to follow the Bush administration’s line on Iran led to his sacking (emphasis added):
Jack Straw made two crucial mistakes in his dealings with Tony Blair: one involved the prime minister's relationship with Gordon Brown and the other Iran. Mr Straw has said repeatedly that it is "inconceivable" that there will be a military strike on Iran and last month dismissed as "nuts" a report that George Bush was keeping on the table the option of using tactical nuclear weapons against Tehran's nuclear plants.
But Mr Blair, who sees Iran as the world's biggest threat, does not agree with his former foreign secretary. The prime minister argues that, at the very least, nothing should be ruled out in order to keep Iran guessing. Downing Street phoned the Foreign Office several times to suggest Mr Straw stop going on the BBC Today programme and ruling it out so categorically.
His fate was sealed when the White House called Mr Blair and asked why the foreign secretary kept saying these things. In any case, Mr Straw had boxed himself in on Iran to the extent that he would have had to resign if a military strike became a reality.
In Straw’s “sack,” more evidence emerges that Bush is forcing a showdown with Iran, one that could lead to war.
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RELATED TPJ FEATURES
TPJ, MICHAEL CARMICHAEL, “THE WAR OF GOG & MAGOG (THE IRAN WAR)” (2005)
TPJ, DR. STEVEN JONAS, “JOHN BOLTON AND THE NUCLEAR OPTION” (2005)
SCRUBBING
For the Bush administration, if truth offends they simply scrub it. Scrubbing has developed into an art form.
Most recently, Bush scrubbing is exemplified by his administration’s relationship with Jack Abramoff, who pled guilty to Federal corruption charges. Bush initially denied that he had any personal relationship with Abramoff:
Mr. Bush himself has said that he doesn't recall meeting Abramoff, the once powerful lobbyist who recently pleaded guilty to federal charges stemming from his lobbying practices and has pledged to cooperate with government prosecutors.
Reporters with Time magazine then uncovered several pictures of Bush with Abramoff. The White House went into spin control:
The Washingtonian and Time magazine both reported the existence of about a half-dozen photos showing the two together. They appeared to have been taken at White House functions, according to the reports.
The White House insists the pictures amount to a coincidence and should not be interpreted any more seriously than that.
White House counselor Dan Bartlett (video) acknowledged Monday that Abramoff has attended some events where people "go through receiving lines and get photos with the president." But, he said, "The president does not have a personal relationship with Mr. Abramoff."
Abramoff disputed Bush’s denial:
Abramoff wrote to Washingtonian magazine that he had met briefly with the president nearly a dozen times and that Bush knew him well enough to make joking references to Abramoff’s family.
Abramoff told Vanity Fair that he once was invited to Bush’s Texas ranch, where he would have joined with other big Bush fund-raisers. Abramoff, an Orthodox Jew, said he didn’t go because the event fell on the Sabbath.
The lobbyist said that when Bush made a speech to fund-raisers in 2003, he sat just a few feet from the president. Abramoff, the only lobbyist on the dais, was seated between Republican Sens. George Allen of Virginia and Orrin Hatch of Utah.
Judicial Watch sued the government to obtain records that would partially reveal the extent to which Bush and officials in the White House knew Abramoff. The CIA will be turning those records over to Judicial Watch next week.
It appears that the news for Bush will not be good. In anticipation of the release of records, the White House tries to soften the blow:
[A] White House spokesperson acknowledged to the Associated Press that the President "had met on occasion" with Abramoff. In addition, Abramoff's records indicates that he made at least 200 "contacts" with members of the Bush administration, including then-Attorney General John Ashcroft and senior members of Vice President Cheney's staff.
Abramoff also bragged to his clients about his success in placing his own employees into Bush administration jobs including David Safavian, now in charge of all government procurement at the General Services Administration and Patrick Pizzella, formerly a Marianas lobbyist and currently a Deputy Secretary of Labor. Even Abramoff's personal assistant, Susan Ralston, later became Karl Rove's personal assistant.
Is there any credibility left?
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A FEW RELATED ARTICLES
TPJ, “HEADLINE” (2005) (Bush administration privately seeks to keep Pres. Clinton from addressing environmental group.)
TPJ, “BUSH’S IRRATIONAL LEADERSHIP (2004) (Survey of administration assault on science.)
TPJ, “DAMN THE FACTS (2005) (Bush administration hides, changes and subverts studies of its own government with which it disagrees.)
EMPIRE – OF DEBT
Bill Bonner and Addison Wiggin have authored a book entitled, “Empire Of Debt.” The authors note that:
On an individual and a government level America is spending way beyond its means. The average American household now owes $8,000 in debt on credit cards alone. Meanwhile the government equivalent of credit card spending has seen the deficit hit a record $423bn. With the war in Iraq showing no sign of ending and the imminent retirement of millions of baby boomers, there is little ability - or some might say, will - to pay that money back.
This looks like a system waiting for collapse. Certainly that's the argument of Empire of Debt, the new book whose publicist is so keen to invoke the Fall of Rome. Authored by financial writers Addison Wiggin and Bill Bonner, it argues a system so full of debt must collapse sooner or later.
They think sooner. 'The denial that comforts us today also keeps us from seeing the catastrophe that's rushing towards us like the proverbial freight train,' says Wiggin.
Empire of Debt is well worth reading – before it is too late.
Last Update: 05/14/2006
