[Marxism] Interesting Article on Dollar Collapse in WSJ
sartesian at earthlink.net
Fri Oct 9 09:19:51 MDT 2009
Today's WSJ has this front page story: US Stands By as Dollar Falls
" The dollar fell to a 14 month low against other currencies Thursday,
intensifying a trend that the Obama administration has publicly suggested
it opposes-- but which it appears prepared to tolerate quietly.
Many of America's trading partners, however are pushing the other way. In
Asia, traders said central banks in South Korea, Taiwan, the Philippines,
Thailand, Indonesia, and Hong Kong intervened to slow the dollar's fall
against their currencies.
Asian officials fear that the dollar's fall could crimp their export-driven
In Europe, where the strength of the euro is clouding the prospects for
economic growth, the president of the European Central Bank, Jean-Claude
Trichet, said Thursday that the stated US 'strong dollar policy' is
extremely important in present circumstances."
Indeed it might be-- to Europe and Asia, but not to the US which sees in the
depreciation a tariff by another name and one more plus in the game of
beggar thy neighbor.
But IMO there is more to this than "just" trade war and increased
competition for decreased profits-- and I hasten to add, that I think there
is "more," does not mean the bourgeoisie are conscious of the more, intend
the more, or have designed a policy to implement the more.
And the more is... through dollar depreciation we get increased pressure on
exporting countries and we get MORE: 1) we get effective devaluation of the
face value of the debt securities being held by other governments. And with
effective devaluation of the debt plus increased pressure on world trade,
and major exporting countries, we get MORE: 2) we get increased pressure on
China to revalue the yuan-- we get that pressure on China from exporting
countries who ME TOO the tariff by another name and we get MORE 3) we get
with the pressure for revaluation upward of the yuan, intensified pressure
to make the yuan fully convertible. And once we get a fully convertible
yuan, we get MORE, much more I think than the Chinese have bargained for 4)
we get effective collapse of China's controls on the movement of capital in
and out of the country 5) we get effective collapse of China's ability to
maintain a trading range for the yuan 6) we get the futility of China
intervening in markets to attempt to maintain the value of the yuan by
buying dollars in the markets, and we get MORE 7) we get the currency
traders, the funds with huge dollar resources, resources estimated by the
Financial Times to vastly exceed the combined dollar reserves of Asian and
European central bankers, and then we get the MORE that is really the less
8) we get the currency traders whipsawing the yuan through the currency
markets, up and down, we get, in response to the whipsawing of the yuan, and
the deterioration of capital controls, capital flight, "repatriation" of
"profits," and their redistribution by the currency markets, and we get
these markets doing to China what they did to South Korea, Indonesia,
Thailand, Taiwan, Singapore, the Philippines in 1996-1997-- bringing the
crescendo of overproduction, the tutti of fixed asset investment to a
PS. This is not being defeatist. I am convinced that this scenario will
both precede and remain coincident with tremendous upsurge of class struggle
in China, as the millions of unemployed, the rural and urban poor, the
workers in the major industries, take direct, and expropriatory actions.
And then again, I might be wrong about everything.
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