From today's London Financial Times:
Central banks are shifting reserves away from the US and towards the eurozone in a move that looks set to deepen the Bush administration's difficulties in financing its ballooning current account deficit.And so it begins.
Speaking on the condition of anonymity, 65 central banks that control 45 per cent of global official reserves said in a nutshell that they are deeply disturbed about the spiraling US deficit figures. Having been precipitated by expensive dalliances in warmongering, it’s money that doesn't go toward building anything useful and lasting that can lead to greater national productivity, but is destined to explode in the night and lay waste to everything it touches like a giant fireworks display celebrating the glory and debauchery of twenty-first century imperialism.
The result of so much profligate spending is that the dollar has dropped like a hot sack of French fries against the Euro, and the banks that have been financing our deficit are afraid of getting caught holding the bag as the currency continues to devalue. BushCo. has said that they’re not too concerned about the plummeting dollar, because it will make American goods more attractive to foreign markets, but that hasn’t happened – the current trade deficit is running around 6% of the US economy.
Alan Greenspan warned in November that foreign banks would not be endlessly willing to finance the US deficit. The worry is that when foreign investors decide to unload their investments in US stocks and bonds, it will send their prices plunging and interest rates will soar, puncturing the real estate bubble and putting the kibosh on consumer spending.
Ironic, really, when you look back on Osama bin Laden’s pre-election speech, to see that he and George Bush seem to be working toward the same end:
So we are continuing this policy in bleeding America to the point of bankruptcy. Allah willing, and nothing is too great for Allah.I must say I don’t like this turn of events. I make my living in a business that thrives off of exporting culture, and as the US abdicates its position of both political and now economic leadership, it definitely makes my prospects look a bit dicey. But as a nation we have abused the tremendous power that rests in our hands, attempting to assert our dominance by beating the rest of the world into mute submission for corporate fun and profit, and perhaps it is only right that this power be reigned in by forces of our own creation.
That being said, those who say that al-Qaida has won against the administration in the White House or that the administration has lost in this war have not been precise, because when one scrutinizes the results, one cannot say that al-Qaida is the sole factor in achieving those spectacular gains.
Rather, the policy of the White House that demands the opening of war fronts to keep busy their various corporations - whether they be working in the field of arms or oil or reconstruction - has helped al-Qaida to achieve these enormous results.