Paul Craig Roberts, current currency analysis, disaster

[Robert Oak]

http://www.counterpunch.org/roberts11162004.html
November 16, 2004

<snip>
China's currency peg to the US dollar prevents correction of the US
trade imbalace and imperils the US dollar's role as reserve currency.
</snip>

<snip>
In the post World War II period, the dollar took over the reserve
currency role from the British pound
</snip>


<snip> When the tide turns against the reserve currency, its exchange
value collapses.
</snip>


<snip>
Overcome by hubris and superpower delusion, US policymakers are unaware of America's peril.
</snip>

<snip>
Economists believe that decline in the dollar's exchange value will
correct the US trade deficit by reducing imports and increasing exports.
</snip>


<snip>
This imbalance cannot be corrected as long as China maintains the peg.
</snip>

<snip>
Sooner or later the peg will come to an end--perhaps when China fulfills its WTO obligation to let its currency float. When the peg ends, it will
deliver a severe shock to US living standards.
</snip>

[Dirty Hippie]

1. Paging smart people

Compare this article with this one:

http://money.cnn.com/2004/11/19/pf/expert/ask_expert/index.htm

Whom should a layperson believe?

Would anyone smarter than myself like to add their $.02?

[west michigan]

2. No idea.

Cannot imagine the idea of funding a war and cutting taxes with more simplification to come. Gotta believe captain smith is not worried about icebergs. I don't recall seeing much of these meltdown scenarios during the Clinton administration.

[Robert Oak]

3. this article is warning

But stating an immediate economic collapse is not coming.

That doesn't contradict Paul Craig Roberts...

He is talking a little longer time frame.

[fedsron2us]

4. Most financial journalists are little better than pimps

for corporate interests. If they really knew anything about finance they would be managing their own hedge fund. Paul Craig Roberts was a Treasury insider so he know how the world really works. His analysis looks spot on to me. The US government is now so enslaved to big money that it is prepared to sell out the country to a foreign power for short term profit. In more honest times such people would be regarded as not much more than traitors.

[On the Road]

5. I Hadn't Thought About This:

This imbalance cannot be corrected as long as China maintains the peg.

I had been thinking that at least the weak dollar would help the trade balance, but if our largest importer pegs its currency to the dollar, it really doesn't help that much. It's actually the worst of both worlds. Damn!

That's the idiocy of this unregulated-trade/free-floating-currency philosophy. It used to be that governments could raise import tariffs or devalue the currency to correct a situation like this. Now, we have to wait until the whole system crashes and burns, like South Korea, Mexico, Argentina, or Indonesia. We'll survive, but a lot of people will be wiped out. And the wealthy (many of them foreigners) will scoop up assets at pennies on the dollar.

Back to the Gilded Age. This country never learns.