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4 Jul, 2009 06:03

A false dawn for the dollar

The US administration has been saying it sees the first green shoots of economic recovery. However consumer spending remains low in America, and some experts argue the signs are misleading.

What can you get for a dollar? Not much these days.

Its value dropped considerably at the end of June – and this is despite the Obama administration announcing signs of an economic rebound.

Experts think these are false claims of hope. They see a gloomy future for the dollar and say the $787 billion stimulus package passed earlier this year is only making things worse.

“The green shoots that they think they see don’t reflect any genuine economic growth. They reflect the initial reaction to the stimulus. If you shoot someone up with heroin, you’re gonna get a reaction before there is a withdrawal,” says economic expert Peter Schiff.

And as job losses continue in the US and Americans have less money to spend, their problems become everyone’s problems.

“America consumes 25 per cent of the world’s energy. It takes $3 trillion of the world’s exports every year. If America doesn’t consume, the global markets will slow down dramatically,” believes trend expert Gerald Celente.

Faith in the dollar as a global reserve currency is long gone.

“I think the dollar’s days as a reserve currency are over,” Peter Schiff says.

This becomes obvious when China, the biggest foreign holder of the currency, wants out. They’ve even asked for the topic to be discussed at the upcoming G8 financial summit.

Economists are predicting the death of the dollar. But the US has been printing more and more of them to keep its sick economy afloat.

Read also:  China can do without US dollar?