Viewpoint: World economy teeters; dollar sliding

By Joe Baker, Senior Editor

The snowball is rolling down hill, and it is growing bigger and moving faster. Economic indicators are screaming warnings of a global financial meltdown, and that includes us.

Some $4.2 trillion of your money has been stolen right before your eyes, and the government has done nothing to prevent it; in fact, it is at least partly responsible.

George Soros is a billionaire financier, one of the most powerful in existence. Soros, who recently appeared at a world economic conference, blames the present mess on what some call “the Bush factor.”

He told Reuters news service there is a liquidity crisis in our financial markets. Foreign capital is pulling out and leaving the country. So is much of the domestic big bucks crowd.

Fox News has reported the current rash of corporate accounting scandals will take an estimated $600 billion valuation out of the stock market this year. The U.S. economy requires $1.5 trillion annually just to stay solvent, yet we have much of the national media talking as though the market slump is just a temporary phenomenon and recovery is right ahead.

Catherine Austin Fitts, the former secretary of Housing, contends as much as half the value of U.S. markets comes from criminal activity, such as laundering drug money and cooking the books to make profits look better than they are.

Against this backdrop of corporate malfeasance and federal corruption, there are reports that the White House is quietly putting pressure on the Securities and Exchange Commission to give publicly-traded corporations a six-week moratorium to correct their accounting practices or tell of any further problems. After that, they will be immune from prosecution.

It is said in Washington circles that because of this the State Department has added extra staff to their expatriation office because they expect many more wealthy Republicans to try to flee the country.

Caribbean TV news showed how some of these fat cats spent their July 4th weekend with huge expensive parties at their multimillion dollar beach houses in the Cayman Islands. Their Rolls Royces were lined up in the driveway while sides of beef cooked on the barbecues. The ex-employees of Enron, WorldCom and others likely spent their holiday eating discount hot dogs from WalMart while they lounged in their inexpensive lawn chairs.

The television interviewer asked one of these renegade fat cats if he didn’t think his lifestyle was excessive, considering he was living as an expatriate in a tax-free, non-extraditable jurisdiction, particularly since he had made his money in questionable Republican deals.

This parasite replied: “What difference does it make to us? We stole all the money anyway.” As Andrew Jackson said long ago of the dangers of corporations: “There’s no body to kick and no soul to damn.”

It won’t be the fat cats who suffer when the collapse comes. Observers estimate the loss of public employee pension funds across the country may be near $1 trillion dollars. That could mean hefty tax hikes for you and me.

The Bush bunch could do something about this situation, but they won’t. They have the means to track the money flow out of the country, and they have the authority to seize it. But Dubya and Papa Bush won’t hassle their buddies.

As the world economic scene worsens, U.S. investors are turning to gold and real estate. We once had a gold standard supporting our currency, but that is long gone and for a deliberate reason.

Congressman Ron Paul, R-Texas, noted: “Gold is history’s oldest and most stable currency. Central bankers and politicians don’t want a gold-backed currency system, because it denies them the power to create money out of thin air.

“Governments, by their very nature want to expand, whether to finance military intervention abroad or a welfare state at home. This expansion costs money, and the big-government politicians don’t want spending limited to the amounts they can tax or borrow. This is precisely why central banks now produce all of the world’s major currencies.”

In the week ending July 5, the dollar was at or near parity with the Euro. It is in the neighborhood of 99 cents. The Euro is partially backed by gold, and there are rumors that most U.S. gold reserves have been moved to Europe.

Most of the world uses the U.S. dollar as reserve currency. They hold trillions of them. If another currency were seen as more valuable or more stable, then all of that money would come back here, inflation would soar, and the dollar would lose value.

Charles Minter and Marty Weiner of Comstock Partners, Inc., a mutual fund management company, see increasing moves toward tariffs and protectionism and market manipulation. The initial move was President Bush’s effort to impose tariffs on foreign steel.

There also has been tinkering by the Federal Reserve with interest rates. Minter and Weiner comment: “A successful engineering of coordinated global interest rate cuts among industrialized countries should trigger a round of competitive devaluations and then full-fledged protectionism and tariffs. This will be followed by an attempt to dump goods at reduced cost on our trading partners and following that is the treacherous debt defaults, bankruptcies and credit liquidation.”

The Bush administration, Congress and the Fed have made an assessment of all this that does not look good for our economic future. All they have to offer is more of the same, which will bring us closer to national bankruptcy and a lower standard of living.

Rep. Paul warns that we cannot depend on government to restore trust to the markets. He calls for a return to the gold standard and implementation of sound fiscal policy and true capitalism.

If the worst scenario occurs, the issues that now distract the populace, like abortion, terrorism and evolution will hold little meaning. The only issues of concern will be food, water, medicine, clothing and shelter.

The American consumer has run out of credit and buying power. If the housing, banking and credit bubbles break, what then?

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