EconomicCrisis.US

The United States may face a series of asset price bubbles and a rerun of the financial crisis unless it lets the dollar fall “at least” another 25 percent, economist Bernard Connolly said on Tuesday.

Because fierce international resistance will likely prevent such a large dollar devaluation, Connolly told Reuters the Federal Reserve may instead have to extend indefinitely its artificial support of a struggling U.S. economy by purchasing another $2 trillion in U.S. Treasuries and federal housing agency debt.

Some investors have started to watch Connolly’s forecasts. In February, he accurately predicted the Fed would have to buy Treasuries to boost the money supply and reduce borrowing costs for companies and households.
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Sooner or later, the Financial Crisis Inquiry Commission, created by Congress to investigate the causes of the recent and ongoing financial crisis, will no doubt examine the technical aspect of the financial collapse — low interest rates, credit default swaps, derivatives, cheap mortgages that ballooned and other factors that almost wrecked the global economy.

Probably among the many things the commission members will not do, however, is read “The Origins of Totalitarianism,” the 1951 book by the German-born political theorist Hannah Arendt, which at first glance would seem to be utterly detached from a crisis that took place more than three decades after the author’s death.
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The truth now is: “He who prints the money makes the rules” — at least for the time being. (…) The goals are (…): compel foreign countries to produce and subsidize the country with military superiority and control over the monetary printing presses.
Ron Paul

In November of last year, at the third extraordinary Summit of Heads of State and Government of the Bolivarian Alternative for the Peoples of Our America (ALBA) – Peoples’ Trade Agreement (TCP), the presidents came together with the intention of confronting the crisis of the global capitalist system. Considering the volatility of the international financial system, the untenable situation of the capitalist model with its destructive logic, and the absence of proposals and categorical measures by the big global power centers in order to confront the crisis, the presidents of the ALBA member States shared the opinion that the international financial system cannot simply be re-founded but has to be replaced by a different one, based on solidarity, stability, ecological sustainability and social justice. The Heads of State concurred with each other in that the countries of our region, if their response to the crisis intends to be efficient, definitely have to break lose and protect themselves from the grip of transnational capital so as to be able to take a different direction that does not make them dependent on the eroded international economic and financial system, nor on the US dollar hegemony, artificially maintained and literally imposed by force. To this effect, they agreed on creating a Latin American monetary zone that would, in its first phase, comprise the ALBA member States and it was further detailed that the monetary zone would count with a Chamber for the Compensation of Payments and a Stabilization and Reserve Fund, financed by the contributions of its member States. What concerns the economic policies of the future Latin American monetary and economic zone, the Heads of State agreed on the implementation of an expansive policy of demand stimulation, Keynesian in nature, promoting investments to further the development of complementary economic activities. (1)
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International finance has always been one of the more elusive areas of economics, in part because the channels through which capital moves around the world are so tortuous that the system looks as if it had been thought up by Rube Goldberg. It’s not surprising, therefore, that among all the various forces and factors to be blamed for the current global economic crisis — deregulation, Alan Greenspan, credit-default swaps, the power of the financial lobby, excessive leverage, securitization, Wall Street greed — the most difficult to get one’s head around is the international monetary system.
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