What�s behind the
rise of one and fall of the other? Is it simple as a headline from the New York Times �Dollar Hits 2-Year High
Against Euro�? Or is it as complicated as the manipulation of economies with
the rankest political skullduggery of the neocons? Yes, certainly the latter.
headline, Edmund Andrews� article reported on November 8, �The dollar rose on
Tuesday to its highest level against the euro in two years, propelled by rising
interest rates in the United States and rising pessimism in Europe.� Obviously,
the rising interest rates create a larger income stream for the government. In
fact, the Fed has been steadily nudging the interest rates up in increments for
months, in hope of strengthening the dollar.
One side effect is
that the face value of bonds, which rise and fall in inverse proportion to
interest rates, have been devaluing, although their yields remain fixed. This
impacts on people with fixed income bond portfolios. For instance, if you
wanted to sell off some of your bonds, you�d lose money on your original
Because the promise
of higher interest rates, and therefore higher yields from new bonds, will draw
new moths to the flame of investment. On the other hand, as cost of borrowing
money rises, it�s tougher for American manufacturers to borrow, and, therefore,
harder to compete effectively in foreign markets. So, all things considered,
the glow of the dollar is not so rosy.
prospect of higher interest, the greed factor, is making investors� mouths
water around the market�s troughs. Despite the fact that the US �current
account,� that is, our imbalance in trade and investment with the rest of the
world, is headed upwards of $700 billion, at about 6 percent of the gross
domestic product (GDP). This is not so good, either.
central banks of Asia hold more than 1 trillion worth of our dollar-denominated
securities. They�re our bankers. Ironically, their money comes from China�s
working families, who tend to save about half their gross incomes, which
average about $880 a month. This instead of spending their way into debt, as
the Los Angeles Times reported on
November 9 in an article, �Anxiety Drives Chinese Fixation on Frugality,� by
Actually, I don�t
think the Chinese are fixated on frugality at all. I think they are a little
more real than we are in terms of keeping a nest egg to take care of elderly
parents, themselves as they age, to have funds to educate their children and to
supplement the widening holes in their government healthcare. Those are some
decent family values, if you will.
Debt As a Way of Life
spendthrift government, which lives on diving deeper into debt, Americans not
only don�t save anything any more. Lee reports, �US households have been
spending more than they have been earning in recent months. That contrasts with
an average savings rate -- or savings as a percentage of income -- of 8 percent
from 1950 to 2000.
Two thousand-one is
about the time Bush Jr. took over the helm, and the skid from surplus to
deficit took over. Our national deficit for fiscal 2004, ending Sept. 30,
weighed in at $412.55 billion. Our accumulated national debt is some $7.5
trillion, as of now our personal revolving credit card debt rolled in at an
all-time high. At the end of the third quarter of this year, the number was
$801.5 billion dollars.
To the best of my
ability, after a long search on the web, about 71 percent of credit card
holders carry about $9,000 in revolving debt per annum. I understand that among
these people are those using one card to pay Paul, another Peter, in other
words, to live, and I have heart for them. But how many people are simply
tugged endlessly by the American Dream marketing machine into living over their
heads? Whoever you are, be careful.
gathered in 2004 for PBS�s Frontline
show �Secret History of the Credit
Card,� the average American family has eight credit cards. Of the nearly 144
million Americans who have general purpose credit cards, approximately 55
million of them pay their bill in full each month. Thirty-five million make
just a minimum payment each month. Forty-five million are revolving in larger
but not full payment. The industry jargon for a guy like me, who pays his bill
in full every month, is �a deadbeat.� Imagine. And yet, they give me a high
FICO score, whatever that is. I won�t start playing with the acronym
possibilities, well maybe one: Friggin Intelligent Cheap Old-timer.
In 2004, the
average revolving family credit card debt was $8,000. Interestingly, a credit
card company must only give its customers 15 days notice when changing the
terms of the cardholder contract. So keep your eyes on your statements.
apocalyptically, universal default needs to be triggered by three factors: (1)
you go over your credit limit on another card (2) Fail to make a payment to
another creditor, (3) apply for and receive a loan. That�s not exactly, a quick
slap on the wrist before you drown. Yet, your credit card issuer can raise your
annual percentage rate (APR) automatically for any one of the above three
reasons. I said, watch those statements.
Also, the national
banks, which issue most credit cards in the US (banks such as Chase, MBNA or
Citibank), are regulated by the Office of the Comptroller of the Currency, part
of the US Treasury Department. That should be comforting if you owe a bundle.
And catch this one: the reason there are no legal limits on the amount of
interest and fees that banks can charge for a credit card is that two, count
�em, two US Supreme Court decisions permit banks to charge whatever the market
will bear. Caveat emptor: even the Supremes are out to screw you. As if you
doubted that for a minute.
So, bottom line, as
to the dollar up, it�s up because the interest is up, and often up your wazoo.
And somebody else will be screwed so the investor can make a few bucks. But
then, I seem to have forgotten why the euro is down.
Why the Euro Is Down
First, as the New York Times article suggested, �For
Europeans, the decline of the euro reflects new gloom -- possibly aggravated by
12 days of rioting in poor neighborhoods across France -- about growth in the
euro zone�s biggest economies. Germany, France and Italy, which together
account for more than half of the euro zone�s economic activity, are growing at
barely 1 percent or less this year. Aside from the riots in France, Germany
remains bogged down in a political stalemate that has greatly reduced the
chances for a long-promised overhaul of economic regulations.�
And where are the
riots coming from in Europe? Most notably in France. Well, the Times and other venerable papers will
tell you it�s about disillusioned youth from North Africa living in high-rise slum
projects, like those of New York or Chicago, who can�t get jobs, who are put
upon by police, who are humiliated into despair, and had no option left but to
torch cars after two young men were electrocuted in a police chase. Ah yes,
deja vu all over again, the 60s redux. I can dig it. No one wants to be the
invisible divisible man. Burn baby, burn. But who besides the youths are
lighting the fires and the passions there?
In Fresher Detail
For that answer,
let�s turn to that bearded D.C. muckraker, investigative reporter, former Naval
Intelligence officer, and administration pain in the ass, Wayne Madsen, who
brings us a breath of fresh information. Scroll down to November 9 on his website
for "France imposed a state of
emergency . . . "
November 9, 2005 -- France imposed a state of
emergency as rioting continued for a 13th straight night and spread to more
towns, including Calais, the French end of the "Chunnel" rail link to
England; St. Raphael; Amiens; Grasses; Bassens; Savigny-sur-Orge, and Arras.
Other cases of arson were reported throughout Belgium -- in Ghent, Antwerp,
Lokeren -- and in Germany, where Cologne was hit for the first time with car
WMR [Wayne Madsen Report] has emphasized that
the arson attacks are well planned, coordinated, and only plaguing the three
major NATO countries that opposed the war in Iraq. For that reason, European
law enforcement and intelligence agencies should place 24x7 surveillance on
Israeli diplomatic and intelligence personnel who may be engaged in "Lavon
Affair" and "911" style false flag operations. Such an operation
aimed at Venezuela's President Hugo Chavez may have just been uncovered in Trinidad
Keep going as if
you�re on the Autobahn, fresh insight blasting in the window, you coming to
this turn in the road . . .
What is happening in France has all the signs of yet another possible
neo-con "false flag" operation in the same category as the Niger
fraudulent uranium documents, the provocative actions of Israeli agents in New
Jersey who were dressed up as Arabs during the morning of 9-11, unexplained
Spanish and British government activities surrounding the train bombings in
Madrid and London, and recent deadly bombings in Delhi during Hindu and Muslim
holidays attributed to a previously unknown Kashmiri group. The neo-cons have
been unhappy about India's Congress government (a government the neo-cons are
trying to link to the UN Oil-for-Food scandal), which unlike the previous Hindu
nationalist government, is making peace overtures to neighboring Pakistan. As
with France, India immediately suspected closely coordinated planning in the
bombings and sought to analyze intercepts of thousands of cell phone calls
placed in the Indian capital shortly before the bombings.
The French politician who benefits the most from this explosion of
violence in a country where Muslim citizens constitute a significant minority
is Sarkozy. The losers stand to be de Villepin's faction of the Gaullist RPR
party and a newly-resurgent Socialist Party, which rejects the neo-con
international agenda. It is not coincidental that the rioting is mainly
plaguing cities and towns governed by Socialist and Communist mayors -- leaders
who are now caught between addressing the social problems that helped spark the
violence and responding to calls for a return to law and order.
The Socialists, Greens, and Communists are charging Sarkozy with
inciting greater violence and then failing to respond to it adequately, thus
ensuring the rioting would spread beyond mainly Muslim areas in Paris to
wealthier Parisian neighborhoods and beyond Paris to Rouen, Lille, Nice, Dijon,
Strasbourg, Marseilles, Bordeaux, Rennes, Pau, Orleans, and Toulouse. Later, the
closely coordinated rioting spread further to Lyon, Roubaix, Avignon,
Saint-Dizier, Drancy, Evreux, Nantes, Dunkirk, Montpellier, Valenciennes,
Cannes, and Tourcoing.
And off Madsen
zooms, identifying the provocateurs, the Company & Friends. Not unlike those
who haunted the 60s riots in America, and exploited the misery, despair,
joblessness, institutionalized racism, fascism, and whole bag of political
nightmares, which existed, and exist to a degree in France right now, and lend
themselves to the same kind of violent exploitation.
I believe the
French riots are orchestrated, unlike what the powers that be would have us
think. As Madsen points out, the powers that be want to wreak havoc on the
economies of those nations that disagreed with our going to Iraq. Madsen
continues to post new incidences of the fire-bomb terror spreading even to the
Basque region of France, while Sarkozy continues to refer to the North African
youths as �scum� and that they should
be hosed down, �Karcherized,� referring to equipment made by a German firm that
once built ovens for the Nazis.
�Karcherized" (pressurized water hosed).
[Note: Karcher is a German firm. Its founder, Wurttemberg native Alfred
Karcher, sold 1200 "hardened furnaces" for smelting alloys until
1945, including during World War II. It now manufactures multi-purpose nuclear,
biological, and chemical decontamination systems for the Pentagon.] Sarkozy
delayed imposing curfews, permitting rioting to spread to 300 French cities,
towns, and villages. It would be very interesting to see transcripts from
signals intelligence agencies of Sarkozy's international phone conversations
after the electrocution of two teens in a north Paris suburb.
So once again, even
as the stink is rank in the air, the administration finds a way, this time
through the dollar, through economic, political and social upset, to even a
score with France. It's another filthy story on top of the Libby leak, the
Plame outing, the Rove roving from reporter to reporter about Plame�s CIA
operative status, the Cheney mention a month before to his chief of staff,
Libby, (Louis Liebowitz) of just who Plame was: the wife of Ambassador Joseph
Wilson, who had lambasted the administration for its claims of weapons of mass
destruction, the availability of yellow cake uranium in Niger, and their
imminent use, and predicted by that eminent talking head, Condoleeza Rice to culminate
in a mushroom cloud, and so on.
But then filth is
what these people are about. The filth of pointless violence, illegal war, mass
murder, torture, misuse of hundreds of billions of dollars for war, misuse of
human resources (2,000-plus of our soldiers gone, 200,000 Iraqis), fraud for
personal enrichment, tax cuts for the rich, mauling of the poor and the
environment, the Bill of Rights, the Geneva Conventions, etc. There is a list
in hell waiting for them with the host smiling at the door. For these are, as
Lyndon Larouche so aptly named them in the title of his latest book, the Children of Satan. These are the
terrorists, inciting terror via disgruntled Muslim groups or dark operatives,
in and out of government, contractors as they are called, to turn the world
upside down, whether in France, Venezuela, or Timbuktu, or as they once did in
Kosovo and Albania.
So how�s the dollar
doing? Count on it to slide again. Because of the inevitable urge this
government has to overspend on all the wrong things. Read back to 1929 and see
if you find some of the same elements at play: intense margin buying, deep
personal debt, an elitist US government, and a free market economy that would
gobble your feet as soon as look at you. Read up to Roosevelt�s day when he put
the unemployed to work to build up the infrastructure and give people back their
self-respect, not to mention Social Security and unemployment insurance. He
then built the strongest manufacturing machine ever to save us from the swine
of the Third Reich. That�s simple human economics. That�s the kind of guy I�d
like to see president today.
Jerry Mazza is a
freelance writer, living in New York, center of the economic bubble called Wall
Street. Reach him at email@example.com.