Lucky USA prepares for a soft landing

[Chris Burford <cburford@xxxxxxxxxx>]

The first sign of a downturn in the readiness of US consumers to buy, and
the probable new administration and Greenspan warn of a recession.
Greenspan's modulated comment is enough to be taken as a signal that US
interest rates are likely to be lowered. The stock markets rise.

What is the dog that does not bark here? That this instructive round of
little signals between the people who run the country, can take place
without any attention having to go to the effect of a cut in interest rates
on the international position of the dollar.

After all if the US goes into a recession it will slow down world trade so
much that all countries will have to support the US allowing the value of
the dollar to fall anyway. So its position as both a national currency and
world money remains secure. Self evident really isn't it? Does not even
require comment.

Compare the plight of a trading bloc even as powerful as that of Europe.
The first sign of recession precipitates a gradually increasing vicious
circle very much involving the exchange value of the currency which falls
substantially against the US dollar. This will only level out when the Euro
has fallen so much below a realistic level that finance starts coming in.

The US loses only a few months of potential growth while Europe loses the
best part of several years.

These are some of the unseen effects of the massive global tendency for the
uneven accumulation of capital, which the US in particular has every reason
to oppose being brought under global democratic control.

Meanwhile possible schemes for greater global democratic control of the
world economy are criticised by ultra-leftists, some in the name of
Marxism, as reformist, even though they have no strategy for precipitating
the instant definitive world revolution against capitalism.

Prepare for a soft US landing, while world inequalities widen.

Chris Burford

London