- RHINEBECK, NY -- The
United States of America is up for sale, and the Federal Reserve keeps
lowering the selling price.
- On January 22nd, with the global financial markets in
meltdown, the Federal Reserve again bowed to Wall Street's demands for
cheaper money by slashing short-term interest rates 75 basis points the
biggest one-day rate drop in Fed banking history. Pressured by credit squeezed
banks, brokerages, buyout firms, faltering bond guarantors and assorted
deal makers wanting deeper cuts and cheaper cash the Fed dropped rates
another 50 basis points eight days later.
- The equation is simple, the formula is proven and the
outcome is predictable: The deeper the Fed cuts rates, the cheaper it is
to borrow money. The cheaper it is to borrow money, the less the dollar
is worth against stronger foreign currencies. The less the dollar is worth,
the less it costs holders of stronger currencies to buy up America. And
that's just what they're doing. Strong currency nations are buying up America
like a third world country. (See "Top Trends 2008," Trends Journal,
- Already holding trillions of greenbacks in reserve and
getting billions more each day from the USA which imports most of
what it needs from other nations foreigners flush with cash will
accelerate the pace of acquiring American assets at bargain basement prices.
Indeed, even before the latest Fed rate-cut frenzy, last year, with the
dollar down double digits against key currencies, foreign interests bought
into or bought out nearly a half-trillion dollars worth of
American banks, brokerages, factories, properties and prized possessions.
- Up 90 percent from 2006 and more than double the average
of the last decade, the "Buying of America" trend is seen as
an encouraging sign of economic vitality by Washington and applauded as
beneficial by beleaguered financial firms scouring the globe begging for
- For example, once a staunch critic of Arab owned entities
controlling vital US interests, New York Senator Charles Schumer applauded
the recent $6.6 billion infusion of foreign cash into Merrill Lynch saying
it " strengthens our economy and creates jobs."
- "This is a vote of confidence in the American economy,
the American marketplace and the American worker," echoed deputy US
Treasury Secretary, Robert Kimmitt, along with the steady chorus of pundits
and professionals featured in the business press praising foreign ownership
of US assets.
- Among the presidential candidates, if they address the
"Buying of America" trend at all, the stock campaign promise
is a call for more "transparency" from foreign owners as though
they would make it happen and that it would really matter.
- As for the general public even as wages shrink,
living costs increase and debt burdens grow there is little understanding
of how cheap dollars deteriorate their living standards or how foreign
ownership will affect their future.
- Trendpost: The Trends Research Institute does not provide
financial advice we forecast trends. We forecast that despite periodic
corrections, the US dollar will continue its downward slide, and that the
weak dollar = strong gold trend will push gold to $2,000 per ounce. (See
"Gold $2000," Trends in the News ®, 4 November 2007.)
- Gerald Celente
- The Trends Research Institute
- Media Relations: 845.876.6700 Ext. 311
- Cheri Van Deusen:
- © MMVIII The Trends Research Institute