George 'Rose Rev' Soros seems pretty convinced and when you read his words it's hard to argue with him.
``Alan Greenspan mishandled (the U.S. economy) by keeping interest rates too low too long and also ignoring dangers in the housing market,'' Soros said.
The U.S. dollar will remain ``the most important reserve currency,'' Soros said. ``This is the end of credit expansion based on the mistaken belief of market fundamentalism, that you should let markets have total freedom.''
What exactly is Soros referring to when he says 'market fundamentalism'? It's a quasi codified slam on the concept of laissez-faire or a 'free market' approach to the economic markets of the world. In other words, let private enterprise do what it do, doggy and keep your Gov't intervention to yo' damn self.
Another way to look at the concept is, if you keep Capitalism 'pure' and based on the goal of private corporations making as much money as possible, no matter how large and bloated with profit those corporations get, it's always better for the economic health of that country and its partners than having government agencies impose limitations to try and 'even things out' or keep any one entity from getting too Hulked out. OR, keep transactions between buyers and sellers. When you stick a third party in the middle to artificially regulate that transaction, even if it seems like a good idea on the micro level, it's really not. Certainly individual human avarice and the concept of 'do only evil' can and do come into play, but we digress...
So is any of that even close to being true? Don't ask us! We can't even figure out why our Skype stopped working. What we DO know is that, regardless of your overall approach to wealth distribution or ownership of land and capital you have to admit that the U.S. is reeling from a Greenspan hangover that there doesn't seem to be any good cure for. Every time the interest rates were adjusted throughout Greenspan's term as Fed Chief, the markets responded positively, in the short term. This allowed more and more potential home buyers to enter the market as time passed, thereby allowing more and more lenders to kick down unscrupulous practices onto those home buyers - many of who are now either in the process of being foreclosed on or scrambling to keep up with their mortgages and wondering how much longer they can hold on.
Of course that's mad suckage for us Y(W)anksters, but it's a lot deeper than that. When the U.S. experiences inflation and or recession, the ripples travel a long way past our rapidly dissolving borders and rock boats who's sails we cant' even see. Still, the same wind eventually hits our faces and travels right back around again.
"...it's basically the end of a 60-year period of continuing credit expansion based on the dollar as the reserve currency,'' Soros said in a debate today at the World Economic Forum in Davos, Switzerland. ``Now the rest of the world is increasingly unwilling to accumulate dollars.''
You know how you always hear people say "America PWNS! We kick your country's ass because.. well, just because we do! STFU!"? Well, if they were talking about reserve currency they were basically right. The problem is, most of those people were talking out of their asses about nothing at all. STILL, being the designated reserve or 'anchor' currency is a big dang ol' deal. Why? Because for a long, long time the U.S. Dollar was the main choice for a lot of other governments and global institutions to keep large reserves of and use for things like indexing the price of oil and gold. That meant that the U.S. could purchase these commodities at a cheaper price than anyone else, plus we got to borrow our money at a slightly cheaper rate than other countries. When you borrow as much as the U.S. does, a little percentage shaved off the top goes a LONG way.
All that has flipped upside down recently, which is why you're seeing emergency Congressional stimulus packages being passed now. Again, we stress that we're not saying Soros is 100% right about this, but it IS fair to ask the question, especially with hindsight - Should the U.S. have bitten the bullet sooner and taken a less vicious hit to the economic gut, as opposed to the silver bullet with our name on it currently lodged in our lumbar region? Die we overdo the 'American Dream' of owning a home? It's pretty clear that's the case at this point, although there are healthy arguments to be made on both sides.
While the opposing sides argue, I guess the people in the middle will scratch our heads and decide what we're gonna spend our $600 tax cut on. Finally! We can afford the PS3! If only we actually wanted one... stupid Sony.
Comments