Wednesday, June 01, 2005

INTO THE BRETTON WOODS

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Into the Woods by Sondheim
Bretton Woods II collapsed some time ago. Everyone is pretending it isn't pushing up daisies or in this case, venus fly traps. But it is dead, Jim.

Since no one is doing anything about the corpse, everyone gathers around watching it rot. Now the Germans who have a history concerning dead currencies and a phobia about this complained about the stench.
A political storm has broken out in Germany over reports that the government may be distancing itself from the European single currency.
Stern magazine said that Finance Minister Hans Eichel had been present at a meeting where the "collapse" of monetary union was discussed. The government is planning to blame the euro for Germany's economic weakness, the magazine added.

The report was dismissed by both the ministry and Germany's central bank.

But it comes at a sensitive time for Germany, as the country gears up for a possible early general election following regional poll defeats for Chancellor Gerhard Schroeder's ruling Social Democrats (SPD).

The euro dipped sharply when the report came out on Wednesday morning, hitting an eight-month low of $1.2218 by 1600 GMT.
Two months ago when I started this blog I wrote about the super secret meeting China held with the ASEAN nations that the USA was pointedly cut out of not only participating but was cut out cold! The Japanese finance minister blurted out that maybe the dollar was going to be wiped out and Japan should not buy anymore American currency products. This caused Condi to fly over and make huge promises to Koizumi like entry into the Security Council, control of the China Seas, American military handed over to him to do as he pleased including the nukes...and he trotted off to start one fight after another with the outraged Chinese who gave him tit for every tat, alarming all Japanese business people.

The unease of the bankers in Germany are much stronger today than last year. It is obvious that they are edging towards protecting Deutschland ueber alles.
"The mere fact that it has been talked about means that it is a big deal," said Jeremy Hodges, head of foreign exchange sales at Lloyds TSB Financial Markets.
On the head of this blog's finance page are three currencies that no longer exist: the gold certificates issued by the Nationalist Party of China, the American gold dollar repudiated by Roosevelt and rendered inoperative and the Weimar Republik Deutschmark from the great inflation.

Money is worth only what people think it is worth. It has no value in itself. It always trembles on the edge of destruction. All you have to do is have people lose faith in it.

When bankers talk outloud about losing faith in money, watch your wallet.
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