Category Archives: Federal Reserve Bank

Updated: The Dollar Dethroned

China, Debt, Economy, Federal Reserve Bank, Political Economy

As has been lamented on this space time and again, the trashing of the dollar by the Bush/Barack soul mates has resulted in the currency’s demise as “the bedrock of world trade.”

It’s a slow and sad demise: “The latest sign of the ground shifting beneath our feet is [the report by the Independent today] of plans by Gulf states, China, Russia, France and Japan to end their practice of conducting oil deals in US dollars, switching instead to a diverse basket of currencies.”

“It is not hard to see the motivation for oil exporters to move away from the dollar. The value of the US currency has fallen sharply since last year’s meltdown. And fears are growing, in the light of a spiralling US government deficit, that a further depreciation is likely. They do not want to sell their wares in return for a currency with an uncertain future.”

“It is also easy to see why China would like a world trading system that is underpinned by other currencies as well as the dollar. For the past decade Beijing has been recycling the proceeds of its giant national trade surplus into purchases of US government bonds and other dollar-denominated assets. China too stands to make a significant loss if the value of the dollar falls. For China, however, the timing is much more sensitive. Beijing needs to reduce its dollar holdings, but if it does so too quickly it will bring about the very devaluation it fears. This explains why Chinese officials appear to want this transition to take place gradually over the next decade.”

[SNIP]

The usual tele-Demopublicans will depict this economic impetus as an act of political treachery. But what else can these nations do? Fall on their proverbial swords for the US?

Update (Oct. 7): “Stop printing money,” “We don’t care what you think,” and “You’re a moron”: This is a sweet sample of the heckling that greeted Rep. Steve Israel (D-Huntington), during a healthscare townhall meeting. It’s always encouraging when protesters associate a massive new government program with the debt (dah!), the demise of the dollar, and ultimate economic ruin. I know; this seems obvious to readers on this space, but signs that such basic comprehension is spreading are to be celebrated.

Update II: Bachmann & Paul Against Bernanke

Federal Reserve Bank, Foreign Policy, Iran, Liberty, Military, Politics, Ron Paul, War

I like the idea of a Ron Paul and Michele Bachmann ticket. Paul needs no introduction, but Bachmann is bright in the way Palin isn’t; she is intellectually curious in the way Palin is not (this accounts for why she has beefed up her knowledge of the Fed and is familiar with Tom Woods’ Meltdown); she is attractive, and she drives liberals stark raving mad. (Or madder)

Here Bachmann introduces Paul:

And here is Paul:

Update (Sept. 28): With respect to “Hot Air,” advanced hereunder by Haym as an ostensible source of credible opinion; it isn’t. Credible news, quite possibly, but not opinion. At least not on foreign policy. And not on this site. (Yeah, the adventure in Iraq was fun wasn’t it!) This is a libertarian site; Hot Air is neoconservative. We’ve adjudicated the last 8 years of foreign policy here on BAB in blog posts and in article on IlanaMercer.com. My perspective, which comports with that of Paul, albeit with some differences, has been vindicated. I’m surprised war mongers are unrepentant, and are still be plumping for preemptive war against countries that have not aggressed against the US given the lessons of Iraq. I guess when it’s not your kid who’s hobbling around on prostheses or dead, it doesn’t much move the mind, much less the heart. The “isolationism” pejorative is lobbed by neoconservatives when they wish to discredit those of us who believe in fighting just wars only. It’s like pacifist.

Update II (Sept. 29): I am sure Myron has preordered his copy of “Going Rogue: An American Life.”

'Frau Merkel' Returns

Democrats, Europe, Federal Reserve Bank, Taxation

Richard Spencer of Taki’s: “It’s my view that Takimag readers should muster somewhere between 1.7 and 2.2 cheers for the Christian Democrats of Germany, who proved victorious this weekend in national elections. Their triumph not only secures a second chancellorship for Angela Merkel, but it will allow her to form a ruling coalition with the Free Democrats, who are much like the Club For Growth wing of the Republican Party.” …

“Though a decent and smart woman, Merkel is hardly a dynamic, risk-taking European politician in the line of Pim Fortuyn or Geert Wilders. … Though to her credit, over the past six months, she has issued forth some guarded grumblings about the Fed’s zero-interest-rate policies as well as Washington’s demand that countries with savings and trade surpluses finance Obama’s ‘stimulus’ orgy.”…

“It is certainly a good thing that after last fall’s economic downturn, Germans didn’t go running into the arms of the socialists and instead actually increased the vote totals of the ‘pro-business’ party (the FDP.) But let’s keep this in context. The Social Democrats—which is a kind of unionized, Joe Biden-like party, having dropped ‘gradualist’ Marxism—earned 23 percent of the vote; The Left Party—a breakaway from the SPD, which has picked up gradualist Marxism and looks back with fondness on the German Democratic Republic—received 12 percent; and the Greens—which combines the Baby Boomer New Left with pomo and crunchy insanities of many varieties—got 10. Put simply, half of the country either wanted some kind of retro-socialism (SPD, Left) or else a form of leftism that might actually be worse than what Obama is pursuing over here.”

The complete post is here.

‘Frau Merkel’ Returns

Democrats, Economy, Europe, Federal Reserve Bank, Taxation

Richard Spencer of Taki’s: “It’s my view that Takimag readers should muster somewhere between 1.7 and 2.2 cheers for the Christian Democrats of Germany, who proved victorious this weekend in national elections. Their triumph not only secures a second chancellorship for Angela Merkel, but it will allow her to form a ruling coalition with the Free Democrats, who are much like the Club For Growth wing of the Republican Party.” …

“Though a decent and smart woman, Merkel is hardly a dynamic, risk-taking European politician in the line of Pim Fortuyn or Geert Wilders. … Though to her credit, over the past six months, she has issued forth some guarded grumblings about the Fed’s zero-interest-rate policies as well as Washington’s demand that countries with savings and trade surpluses finance Obama’s ‘stimulus’ orgy.”…

“It is certainly a good thing that after last fall’s economic downturn, Germans didn’t go running into the arms of the socialists and instead actually increased the vote totals of the ‘pro-business’ party (the FDP.) But let’s keep this in context. The Social Democrats—which is a kind of unionized, Joe Biden-like party, having dropped ‘gradualist’ Marxism—earned 23 percent of the vote; The Left Party—a breakaway from the SPD, which has picked up gradualist Marxism and looks back with fondness on the German Democratic Republic—received 12 percent; and the Greens—which combines the Baby Boomer New Left with pomo and crunchy insanities of many varieties—got 10. Put simply, half of the country either wanted some kind of retro-socialism (SPD, Left) or else a form of leftism that might actually be worse than what Obama is pursuing over here.”

The complete post is here.