Fears that the USD would strengthen and cause the worldwide market bubble to burst came to naught as the USD met a grizzly end early today. The Dollar was surging early on comments by the Fed Chairman Ben Bernanke that the Fed was committed to a strong Dollar. This didn’t last long as the Dollar was dragged out into the Canadian forest and eaten by a bear. This was the result of Russia announcing that it will be dumping an unspecified amount of its 400 billion in USD reserves in favor of the Canadian Dollar.
The CanD jumped up about a nickel on the news and the Dollar plunged to a new low against gold and other metals. It also fell to a sixteen month low against the Euro but keep in mind this is also a paper currency and not immune to its own collapse given the damage that Wall Street has done to the world economy.
Unemployment claims dropped last week but the Fed Chairman made it clear that unemployment will remain high. Good news for capitalists as they can continue to drive down wages. Bad news for anybody in the real economy. It is expected that there will be a 140,000 jobs lost on the next monthly report. This is a smaller number than we’ve been seeing if it is true but by no means good news.
We need 125,000 new jobs per month just to keep up with population growth. So even if the government numbers are accurate, we are still losing more than a quarter million jobs every month and they are just plain gone. To put this in real terms this is like losing every job in a good sized American city each month. This damage will catch up with us soon, no matter how big the bonuses on Wall Street.
Weakening the Dollar is a back door way of putting tariffs on imports and eliminating the debt. Germany did this to pay off its WWI reparations and it is a risky game. Fascists like Prescott Bush have a way of inserting themselves into these schemes and they can produce unforeseen consequences. www.prairie2.com