By Jorge Altamira
The American Institute of Statistics is less fortunate than IndeK: complete enough to declare a U.S. recession, a couple of weeks, for a Brazilian minister preferred to be called "currency war". This occurs when global crisis has entered its fourth year on Tuesday black-July 2007. The extension in time, adding even more ominous prospects, is expressing a collapse of the capitalist social relations, which could not be reset automatically or politically (have been des-set even more), despite massive intervention governments and central banks. So she is now also a political catastrophe, as shown by the crisis of European governments and unmitigated failure of the IMF meeting ten days ago. "The metastasis of the world capitalist crisis," the title of a previous article of our authorship (OP-1106, 29/10/2009) described the inevitability of what is now the owner of newspapers and news agencies (which is happening these days is a metastasis of the crisis triggered by more than three years).
The dog's tail
The protagonists of the new outbreak has been the usual: financial funds. Once again, capital is chasing its tail and is the principal agent of the dissolution of capitalism. Indeed, as happened recently with the crisis in Greece, when the funds began to bet on its sovereign debt default and a partial dismantling of the euro zone, have now done the same, but with coins. In mid-July, the foreign exchange markets recorded a sharp increase in the amount traded: 2.6 trillion dollars a day to over 4 billion. The intensity of the speculation was shown by another fact: the buying and selling of currencies is done with a modest investment, 2%, the speculator borrows two, to a near zero interest and currency bought by fifty, with the expectation of making a difference to the volatility of the currency (devaluation-revaluation). The currency exchange is done through debt is valued at one trillion dollars. Any change in the conditions of this speculation, as increases in interest rates or reversal of the value of currencies, would cause failures in the size of which threatened a worldwide depression in late 2008.
Japan
The first currency affected by this speculation was the Japanese yen, which gained unprecedented levels -82 Yen per dollar (before the crisis was trading at about 100 yen to the dollar). Japan's government said then that beyond this level would to sell the yen en masse, because the revaluation penalized exports. The threat became reality once a settlement of 20 billion dollars in a single day. In between, of course, there had been something 'sinister' means the Central Bank of China had joined the bid to the rise of the yen by buying Japanese government bonds, although the amount was modest (6 billion U.S. dollars) indicated that China sought to devalue its currency against the Japanese to promote exports Japan and from there to penalize China. Japan has the dubious honor of having the world's largest public debt: 15 billion dollars, up 300% in relation to GDP. China, meanwhile, admits that its public debt may be purchased by foreign central banks, which blocks a mechanism for its own currency speculation. What happened to the yen (which was bought with a view to revalue), started moving the Brazilian real, the euro, Swiss franc and other currencies like the Australian, Thai and Korean. Japan, however, is going through a massive deflation (falling prices), which affect corporate profits and increases real value of debts. Greater rise in the yen means more deflation (lower prices for domestic and import), but with the added difficulty that there is no room for deflation (decrease in monetary terms) the costs of production. The adventure speculative yen exposed the collapse of the Japanese economy. The same thing happens again in Europe because the appreciation of the euro increases cost of production and emphasizes the difficulty of exporting its crisis. For countries with private and public debt unpayable, this represents the possibility of another earthquake. Ireland is virtually bankrupt, as the rescue of one of its banks has consumed the equivalent of 50% of GDP. Portugal, Spain and Greece are still under threat of default, the appreciation of the euro is a coup de grace for the Italian industry and Berlusconi, Tremonti.
first devalue
Obviously, the villain is the U.S. dollar. The huge U.S. fiscal deficit and the even more enormous printing money to bail out bad assets of banks have established a persistent trend of dollar devaluation. The speculators sold dollars to buy other currencies. This has caused the bubble in the exchange markets. What's more, the growth of unemployment, housing evictions, the default business premises and falling property prices have led the Federal Reserve hinted, to November, an issue even more aggressive dollars. There is a consensus that this issue would be unable to lift the U.S. economy, which bare the intention of producing a massive devaluation that allows an export of its crisis to the rest of the world. Speculation in foreign exchange markets, we and the 'war on cash' and, ultimately, to the displacement of faltering international monetary system. Many observers, of course, do not see it this way and consider the widespread devaluation of the dollar as a last resort to avoid a trade war, because the fixed value of the currency devaluation that raises avoid penalizing foreign trade between nations through customs and tax barriers. The discussion of this adjustment will be made at a meeting of Group of 20 has been convened in early November.
The U.S. default
But that agreement is, for now, impossible. First, because it is not a simple adjustment of the dollar against other currencies, since there are plenty of mismatches between the other currencies, particularly in Asia (Korea South, Japan, China, Indonesia, Thailand), and because it is the same as the position of the euro against the dollar than the yen. China has officially declared that a major revaluation of its currency's plunge into economic chaos that A realignment involves a substantial devaluation of the dollar would mean, above all, a default on U.S. debt held by foreigners-four billion dollars, 1, 8 billion in China. The steady appreciation of gold is an expression of a tendency to default on U.S. government debt. A withdrawal of this capital of the United States not to conclude in default, should be offset by Federal Reserve purchases, thereby currency issue-otherwise, we insist, the U.S. should declare bankruptcy. The threat of inflation that would trigger such compensation would lead, however, an escape from debt by U.S. investors and a surge in interest rates. This increase would require settling all financial and monetary purchases made through debt and, therefore, a chain of bankruptcies. This possibility has recently been identified by the rating agency Moody's (Financial Times, 12/10), reporting that U.S. banks and companies again have borrowed beyond their limits, to buy, besides coins from other countries, other companies or shares in the United States.
An undervalued currency and low interest rates perpetuate the movement of borrowing in dollars to buy other currencies, the monetary war would continue. If, on the contrary, the U.S. increases interest rates, in addition to revalue the dollar would cause a major recession. Many analysts anticipate the possibility of a reflux of speculation on currencies revalue the dollar and trigger substantial losses.
Argentina: inflation dollars importing
The devaluation of the dollar sparked a festival of bonds in Argentina, which fills the pockets of very vulture funds and less vultures, vultures and national. The entry of foreign funds is reflected in the accumulation of reserves by the Central Bank to prop up the peso will not: thus came the devaluation of the dollar against other currencies. But the solution is misleading, because the weight is revalued against the dollar as through the loss of domestic purchasing power, inflation. The Central Bank of the K functions as a garbage dump in the U.S. prints dollars, buying stocks that are devalued. What keeps the K scheme in place is that speculation in Brazil or in Europe is higher, therefore the real and the euro appreciated more than the weight, leaving a margin for export (which despite the trade balance with Brazil is poor). Argentina, as with the major emerging economies, is not far from the global crisis but at its center: imported inflation caused by the devaluation of the dollar and will be destabilized from beginning to end by "the currency war." When reversing the direction of this speculation, speculative capital input current becomes its opposite: a phenomenon of its kind in South Korea in 2009 caused him to lose 60% of its reserves in a few days in Argentina capital outflows occurred for 40 billion dollars.
What our Madam President will propose at the meeting of the G20? Is aligned with whom? Escrachar Busy journalists, Boudou not yet dropped a idea of \u200b\u200bthe head. If you ask U.S. monetary rigor, as does China and Brazil will, lose export advantages offered by the devaluation of the dollar. So surely never forgotten dust off the "carnal relations." The political disintegration of the block can not be dissociated Kirchner depletion 'production model', which has led to precisely the capitalist bankruptcy.
Every balloon is inflated
The current state of the global crisis exposes the perversity of all rescue plans, which offered banks out of the crisis through speculative opportunities and the same methods that led to the corporate and mortgage crisis that sparked the crisis. This also applies to China, where real estate speculation is almost triple that broke out in the United States in 2007, when measured relative to GDP (350 vs. 800% of GDP - Dario Epstein Infobae). Only a bankruptcy that eliminates most of the bad assets and all the superfluous capital, or economic and social catastrophe, can sit the premises of a capitalist restoration. The global crisis has no outlet, in capitalist terms, without a declaration of bankruptcy. A columnist for The Telegraph (11/10), Ambrose Prichard, welcomed the possibility of a dislocation of international trade because, as in the '30s, would promote recovery plans on a national framework. It's another way, however, argue that the bankruptcy filing is inevitable. Martin Wolf, Financial Times editor, says the U.S. has the means to develop monetary war to its conclusion, and that the G20 will submit to this extortion and accept the ultimatum issued by the Federal Reserve from its decision to double the emission of dollars in recent years. The issue is whether China accepts the ultimatum, or if negotiations with the European Union and Japan for its rejection, and opposes requirements that limit the ability of the U.S. to devalue its debt. The capsule of the crisis has reached the bottom of the tunnel.
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