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Escalating Panic Over the Continuing Dollar Collapse

October 10, 2009 (LPAC)—We are now more than a week into the new U.S. Federal government fiscal year, and just as LaRouche forecast, we have entered a new, final phase in the systemic collapse of the entire post-Bretton Woods global financial structure. The panic is on, as reflected in the continuing rumors of a "conspiracy" among major foreign dollar holders, to dump the U.S. currency as the global reserve, and create a new arrangement; and in a new pattern of foreign currency interventions, by several Asian countries, to prop up the dollar through central bank purchases.

Friday's Wall Street Journal ran a front-page lead story, reporting that the dollar has fallen by 11.9 percent against a basket of six currencies since Obama took office. The Journal warned that the Fed and Treasury's support for a weak Dollar, a policy that Lyndon LaRouche denounced on Monday as "tantamount to treason," is bringing the world to the brink of a full-scale dollar crash. John Taylor, a Stanford University economic professor, was quoted by the Journal detailing how close we are to a precipitous fall of the dollar. A senior U.S. intelligence source told EIR today that the talk of a "foreign conspiracy" is "rubbish." "It is the policy of the Fed and the Treasury Department, that has brought us close to the red-line, when an out-of-control collapse of the dollar occurs." The Journal editorial, "The Dollar Adrift," reflected the panic, warning that the continued zero interests rates, soaring Federal deficit, threats of tax hikes and reregulation mean that the dollar is now a poor investment. They described the collapse of the dollar as a "vote of no-confidence" in the economic policies of Obama.

The Financial Times reported on currency interventions by Thailand, Malaysia, Taiwan, Hong Kong, and Singapore, to staunch the collapse of the dollar against their own currencies. "The central bank interventions appeared to be aimed at controlling the pace at which the U.S. dollar declines, rather than solely to stop Asian currencies appreciating," the FT observed.


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