Sinking Currency, Sinking Country


The euro, worth 83 cents in the early George W. Bush
years, is at $1.45.

The British pound is back up over $2, the highest
level since the Carter era. The Canadian dollar, which
used to be worth 65 cents, is worth more than the U.S.
dollar for the first time in half a century.

Oil is over $90 a barrel.

Gold
, down to $260 an ounce not so long ago, has hit
$800.

Have gold, silver, oil, the euro, the pound and the
Canadian dollar all suddenly soared in value in just a
few years?

Nope. The dollar has plummeted in value, more so in
Bush`s term than during any comparable period of U.S.
history. Indeed, Bush is presiding over a worldwide
abandonment of the American dollar.

Is it all Bush`s fault? Nope.

The dollar is plunging because America has been
living beyond her means, borrowing $2 billion a day from

foreign nations
to maintain her standard of living
and to sustain the American Imperium.

The prime suspect in the death of the dollar is the
massive trade deficits America has run up, some $5
trillion in total since the

passage of NAFTA
and the creation of the
World Trade Organization in 1994
.

In 2006, that U.S. trade deficit hit $764 billion.
The current account deficit, which includes the trade
deficit, plus the net outflow of interest, dividends,
capital gains and foreign aid, hit $857 billion, 6.5
percent of GDP. As some of us have been writing for
years, such deficits are unsustainable and must lead to
a decline of the dollar.

A sinking dollar means a poorer nation, and a sinking
currency has historically been the mark of a sinking
country. And a superpower with a sinking currency is a
contradiction in terms.

What does this mean for America and Americans?

As nations realize that the dollars they are being
paid for their products cannot buy in the world markets
what they once did, they will demand more dollars for
those goods. This will mean rising prices for the
imports on which America has become more dependent than
we have been since before the Civil War.

U.S. tourists traveling to the countries whence their
ancestors came will find that the money they saved up
does not go as far as they thought.

U.S. soldiers stationed overseas will find the cost
of rent, gasoline, food, clothing and dining out takes
larger and larger bites out of their paychecks. The
people those U.S. soldiers defend will be demanding more
and more of their money.

U.S. diplomats stationed overseas, students and
businessmen are already facing tougher times.

U.S. foreign aid does not go as far as it did. And
there is an element of comedy in seeing the United
States going to Beijing to borrow dollars, thus putting
our children deeper in debt, to send still more

foreign aid
to

African despots
who routinely vote the Chinese line
at the

United Nations
.

The

Chinese, whose currency is tied to the dollar
, and

Japan
will continue, as long as they can, to keep
their currencies low against the dollar. For the Asians
think long term, and their goals are strategic.

China—growing at 10 percent a year for two decades
and now growing at close to 12 percent—is willing to
take losses in the value of the dollars it holds to keep
the U.S. technology, factories and jobs pouring in, as
their exports capture America`s markets from U.S.
producers.

The Japanese will take some loss in the value of
their dollar hoard to take down Chrysler, Ford and GM,
and capture the U.S. auto market as they captured our
TV, camera and computer chip markets.

Asians understand that what is important is not who
consumes the apples, but who owns the orchard.

Other nations that have kept cash reserves in U.S.
Treasury bonds and T-bills are watching the value of
these assets sink. Not fools, they will begin, as many
already have, to divest and diversify, taking in fewer
dollars and more euros and yen. As more nations abandon
the dollar, its decline will continue.

The oil-producing and exporting nations, with trade
surpluses, like China, have also begun to take the stash
of dollars they have and stuff them into
sovereign wealth funds
, and use these immense and
growing funds to buy up real assets in the United
States—investment banks and American companies.

Nor is there any end in sight to the sinking of the
dollar. For, as foreigners demand more dollars for the
oil and goods they sell us, the trade deficit will not
fall. And as the U.S. government prints more and more
dollars to cover the budget deficits that stretch
out—with the coming retirement of the baby boomers—all
the way to the horizon, the value of the dollar will
fall. And as Ben Bernanke at the Fed tries to keep
interest rates low, to keep the U.S. economy from
sputtering out in the credit crunch, the value of the
dollar will fall.

The chickens of free trade are coming home to roost.

COPYRIGHT

CREATORS SYNDICATE, INC
.



Patrick J. Buchanan
needs


no introduction
to VDARE.COM
readers; his book


State of Emergency: The Third World Invasion and
Conquest of America
,

can be ordered from
Amazon.com.