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Death of the dollar

Death of the dollar

The sliding dollar has prompted the region’s governments to question if their currencies’ dollar peg is doing more harm than good (again).

November 16, 2009 9:32 by



One thing’s for certain: Barack Obama won’t be winning the Nobel Prize for Economics.

The American president’s misguided plans for a European-style social welfare system are sending the American economy into a tailspin. The actions of this former neighborhood organizer, who apparently knows nothing about how the capital markets operate, is sending chills down the spines of central bankers around the globe.

Nowhere is Obama’s anti-capitalist fervor more closely scrutinized than in the Gulf. One effect of the president’s economic fumblings is that the severely weakened American dollar is in danger of being scrapped as the standard to which most currencies here are pegged.

Stuffy Norwegians aside, it’s difficult to find anyone these days who thinks America’s leader has a clear plan for anything, especially a plan to restore credibility to the dollar. Obama’s social welfare programs are costing vast amounts of money – some $1.4 trillion this year and rising. The debt accounts for a greater percentage of that country’s Gross Domestic Product (GDP) than at any time since 1945, when America mobilized its economy to fight and win a two-front world war.

Speaking of World War II, we can’t help but think of the hyperinflation that plagued the Weimar Republic and helped Hitler’s rise to power. In what could be an eerie reprise of that troubled era, Obama is choosing to print cash like it’s going out of style in order to pay for his socialist agenda. Which means America is in danger of facing its own hyperinflation soon. Not to mention the fact that the buying power of the dollar is sure to erode even further.



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2 Comments

  1. gopalkt on November 21, 2009 11:18 am

    The dollar, depegged?
    No way, it’s too stable to be let go of
    Ups and downs, big ones even, yes – but the dollar is still the currency of the world

     
  2. KARL on December 3, 2009 12:11 pm

    The Dollar and American power and hegemony are both history except the americans don’t realise it yet.Just like the 20th century was the american century the 21st century will be the asian century: the rise in power of china,india and possibly even brazil on the back of their increasing economic power.It is also interesting that the most populous countries seem to be the prospering ones.Even in eastern europe for example;Poland which is far more populous than either czech or slovak republics or hungary is a much bigger economy than the others.Seems you need a certain minimum population to build critical economic mass.

     

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