[p2p-research] Meltdown alert

[Michel Bauwens]

(adam: this has a direct bearing on our discussion yesterday on deflation
vs. inflation, here's the evidence for the scenario that initial deflation
may be followed by hyper-inflation, as was indeed the case in previous
meltdowns!!)

Dear friends,

Not being an expert, I nevertheless think we are witnessing the end of an
older ...

Here are two very important articles that shed some light on the possible
suicidal nature of the measures that the Obama administration has been
taking.

The first article, by Paul Jorion is in French, and claims that the date of
March 18, when Obama decided to allow quantitative easing, i.e. the unbacked
printing of money by the Federal Reserve, will be known in history as the
beginning of the death of capitalism, the end of the fiction of any worth of
the dollar, see http://www.pauljorion.com/blog/?p=2354

(thanks for the reference to dante)

This article links to a second in english, see
http://www.atimes.com/atimes/China_Business/KC18Cb01.html, where the Asia
Times explains how China has finally started to divest itself from its
dollar holdings, in a way that also guarantees its dominance in the next
historical era

This is part of a 3-part series by the asia times, that believes that we are
seeing is indeed the end of the dollar-centric world order, and that very
likely, the quantitative easing measures being taken, first by the UK but
then to an unprecedented degree by the Obama administration, is very likely
to lead to a hyper-inflation of the dollar, see
http://www.atimes.com/atimes/China_Business/KC17Cb02.html


In a nutshell:


"To deal with a crisis that fundamentally arose, at length, out of the
escalating risks of shortsightedly spending in colossal sums of
dollar-debasing debt, the US government is attempting to "solve" the crisis
by frantically spending gigantic additional sums of new dollar-debasing
debt. Before this crisis spending binge was undertaken, the dollar's
strength had already been greatly undermined over the past four decades by a
combination of shortsighted dollar-debasing government policies and the
accumulation of huge sums of debt since the 1980s.

According to official calculations, it required $5.54 in 2008 to equal the
purchasing power of just $1.00 in 1970. This comparison illustrates the
potency of inflation in undermining the value of a mere fiat
currency<http://www.atimes.com/atimes/China_Business/KC17Cb02.html#>such
as the dollar.

But now, the US government is risking setting in motion inflationary forces
that are profoundly more potent and difficult to manage. Virtually every
economist on the planet calls this situation one that has the real potential
for seriously and permanently damaging the dollar by inflating away too much
of its remaining value not very far down the road. They also warn that,
specifically due to the extremely risky monetary and budgetary policies now
being embarked upon, the timing will be absolutely crucial for future Fed
watchfulness and actions aimed at preventing a catastrophic, uncontrolled
rise in dollar inflation"

-- 
Working at http://en.wikipedia.org/wiki/Dhurakij_Pundit_University -
http://www.dpu.ac.th/dpuic/info/Research.html -
http://www.asianforesightinstitute.org/index.php/eng/The-AFI

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