The Dollar's Decline Does Matter

LONDON, Dec. 6, 2004

(CBS) Tom Fenton, in his fourth decade with CBS News, has been the network's
Senior European Correspondent since 1979. He comments on international
events from his "Listening Post" in London, and other parts of the world as
well. Most Americans pay no attention to the exchange rate of the dollar,
unless they take a trip to Europe and gasp at forking over the equivalent of
five dollars for a cup of coffee.

Only then do they realize that their paper currency which they once thought
was as good as gold, is only worth what foreigners think it's worth. And
right now, foreigners have a very low opinion of the dollar.

Since the end of the Clinton administration - or to put it another way,
since the beginning of the Bush administration - the dollar has been heading
south at an alarming rate.

Against the Euro, a relatively new currency backed by a European economy
that is bigger than America's, the dollar has lost more than a third of its
value. The same thing has happened to its value against the British pound.

What's going on here?

Economists can give you a lot of arguments and counter arguments, most of
them complex and some a little dodgy, but the simple answer is that America
is living beyond its means.

Our government has been doing what the average American has been doing.
While American families pile up credit card debt and re-mortgage their
homes, the government is piling up national debt and mortgaging our future.

Who is our government borrowing from? Mostly other governments, it seems.
Foreign central banks now hold 2.3 trillion dollars (that's
$2,300,000,000,000) in American IOUs such as U.S. Treasury bills and bonds.
China and Japan are among the biggest creditors. If they decided to sell off
a substantial part of this mountain of dollar assets, the dollar would

Should we care? You bet, as Defense Secretary Donald Rumsfeld would say. The
collapse of the dollar would drive American interest rates sky high. Your
mortgage would suddenly become unaffordable, your credit card debt all but
unpayable. And forget about those foreign trips. Who could afford a ten
dollar cup of coffee?

How did our government get to the edge of this cliff? Again, the answer is
simple. The Bush administration cut taxes, launched two wars in what it
calls the Greater Middle East, and is now bleeding lives and money in an
Iraqi insurgency that shows no signs of abating.

Americans think of their dollar as the world currency that is welcome
everywhere - something like those old American Express ads in which the
salesperson says, "That will do nicely, sir," when you hand over your green
credit card. Well, now our foreign creditors are taking a second look at our

Since World War Two, the dollar has been the world's reserve currency.
Foreign governments hold most of their reserves in dollars. Commodities -
most notably oil - are priced in dollars. And most useful of all for the
American government, when it needs more cash to finance its deficit
spending, it can just print more IOUs to fob off on foreigners.

Most Americans probably think things were always that way. But in the
nineteenth and early twentieth centuries, it was the British pound that was
the world's reserve currency, and before that, the Dutch guilder, etc., all
the way back to the Roman dinarius.

Currencies come and go, like empires. At the beginning of the twentieth
century, when it ran a costly empire that spanned the world, Britain was the
world's biggest creditor. Within a generation, both the British Empire and
the pound were shattered by two world wars and economic mismanagement.

America has not yet reached that point, of course, but we ignore the lessons
of history at our peril. Unless we put our economic house in order and stop
living beyond our means, we could go the way of the British.

And by the way, if the dollar were to lose its status as the world's reserve
currency, what could replace it? Possibly the euro, and a combination of the
currencies of the Asian giants who make all those toys and gadgets you have
been buying for Christmas.

By Tom Fenton ©MMIV, CBS Broadcasting Inc. All Rights Reserved.

The ONLY solution is to enforce The Plan against the N.W.O. Traitorous,
mass-murder, inside-job perpetrators of 911 and the phoney War on Terror:-

Time is running out:-