Friday, January 07, 2005

US dollar hegenony: a Ponzi scheme: "The crash of the dollar would (will?) crumble this entire world-embracing and -organizing political economic doughnut and throw hundreds of millions of people, not to mention zillions of dollars and their owners, into turmoil, with unforeseen and perhaps unforeseeable consequences.

"Many people, high and low on the world totem pole, have a big stake in avoiding that, even if it requires continuing to blow an empty Uncle Sam up like a balloon. Or to refer to a well-know metaphor, to continue to pretend that the emperor with no clothes is dressed up. That still includes China, for which a financial showdown with Uncle Sam would be a blessing in disguise."

"Of course, crashing the dollar would finally also in one fell swoop wipe out, that is default, Uncle Sam's debt altogether. Thereby, it would simultaneously also make all foreigners and rich Americans lose the whole of their dollar-asset shirt, of which they are still desperately trying to save as much as possible by not so doing. In fact, this historically necessary transition out from under the US-run doughnut world could bring the entire world into the deepest depression ever - and in all of them the poorest suffer the most."

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