What Nobody's Saying: The Bailout Will Kill the Dollar

[Christa]

What nobody in the corporate media is mentioning amid all the blather about the $700-billion Paulson bailout proposal is the impact it will have on the US dollar.

We are told that this huge gift to the financial sector - the assumption, at top dollar, of all the bad debt they've piled up--will be at taxpayer expense, but that's only the half of it. (Really only the quarter of it because since the US government is technically bankrupt already, spending more than it takes in each year, all that money will be borrowed, and will be added to the national debt, meaning that just as the real cost of the $500-billion Iraq War is closer to $2 trillion, the real cost of the $700 billion bailout will be more like $1.5-2.5 trillion.)

But besides the direct bill handed to taxpayers for this gigantic con, there is the fact that adding that much to the national debt is also going to drive the dollar down precipitously against foreign currencies. We're already seeing that happen, even while they're just talking about the bailout. The dollar is falling against all major currencies - the Euro, the Yen, the Renminbi and the British pound. And it will continue to fall as the details of the bailout come out.

This will add to already powerful pressures in countries like Saudi Arabia and China, which hold huge quantities of US dollars and US dollar-denominated debt, to shift out of dollars and into other currencies - particularly the Euro and the Yen. Last week, an article in China's People's Daily, which like Pravda in the old Soviet Union, is the official voice of the leadership in China, called for just such a move. Russia is also calling for an end to the dollar as the underpinning of the global economy.

http://www.populistamerica.com/what_nobodys_saying_the_bailout_will_kill_the_dollar

[Rosa Luxemburg]

1. Bush just sold us

[orwell]

2. The dollar has severe structural problems...

with or without the bailout. It is interesting that yesterday, as the Greedy Bankers Lifeline Act looked like it was running into trouble, the dollar traded a bit firmer than the days before when it seemed to be all but a certainty.

The bailout talk has been very Gold and Oil friendly however with both posting large gains since the plan was floated. This would seem to add some weight to the thrust of your post.

[JDPriestly]

3. This article explains what is going on in simple terms.

This is a must read.

[avaistheone1]

4. I think you posted the wrong link.

I couldn't find anything about the dollar there.

[JDPriestly]

12. I think I was responding to the populist... link.

[garybeck]

5. so what's better - gold or Euros?

[whosinpower]

6. I saw a fellow on CNN

Talk about how the bailout would cause the dollar to collapse. He was practically frantic trying to get the message out.

[Warpy]

7. Something else occurred to me

and that this is an attempt to financially hobble the incoming administration and Democratic Congress by giving Wall Street a blank check with no oversight.

That's why they wrote it that way, anyway. I sincerely hope the wimps now in Congress aren't quite that spineless, but they've never surprised me with their valor before.

In any case, it won't work, not when there's a bloated Pentagon budget to whittle at.

[Virginia Dare]

8. It's a frightening prospect to me..

throwing virtually every dime we have into a system that is still profoundly corrupt. I'm not willing to go for that. It's suicide really.

[Wilber_Stool]

9. Something else that isn't being said

is that this $700mil has to be financed with foreign investments.

[crickets]

10. A chilling must-read.

The banking sector, meanwhile, which is the proximate cause of this monumental disaster, won't mind any of this, for it will continue operating on the international stage, shifting its focus to lending money (no longer dollars, though), to growing economies in Asia and Latin America and eastern Europe. And this is what, in truth, the "rescue" of Wall Street is all about.

It's not about saving Main Street, as Paulson claims. Main Street, under the bailout, is toast. It's about helping the banks and investment banks and insurance companies that brought on this crisis to ride it out in style, their astronomical losses bankrolled or absorbed by the American public, so that they can shift their operations overseas and continue with their rape and pillage of the global economy.

The US will be left behind, a smoking ruin, with Americans, like Weimar Germans before them, going shopping with wheelbarrows full of worthless green paper to exchange for a few days' groceries.


We're literally expected not only to take the fall, but to pay for our own demise. It boggles the mind.

[Captiosus]

11. I may not have a syndicated or even a local column...

But I do believe I've been saying this, even here, for the last 4 days.

This bailout is far more nefarious than just bailing out the upper echelon. China already made their position clear - they want an economic order where the United States isn't included. So we're going to turn their debts into liquidity so they can turn around and dump it all in favor of the Euro. As they, and other countries, cash out their Dollar chips, the U.S. economy will be flooded with the money it's been printing. This money will have almost no value because nothing will be backing it anymore and it will be a feedback loop of debt. More debt to try to prop everything up as it fails, taxpayers barely covering the interest on the debt because everyone else who could have helped internationally will be rolling in their Euros, more things failing, more debt to try to stem the tide...

Hello hyperinflation.