Friday, June 06, 2003

John Snow talks down the dollar. George Bush talks up the dollar. The Japanese spend 33 billion yen in May trying to bid down their currency, desperately trying to keep the yen above 115 to the dollar. The UK is in the euro -- no, out -- now maybe in again -- well, maybe not.

And who benefits most from all this uncertainty and instability? You guessed it -- currency traders.

In the immediate post-WWII era, finance capital was put on a short leash globally speaking. Blamed for the Great Depression and dangerous enemies of the entire Bretton Woods system, finance capital was strapped down tightly to keep it from causing too much trouble. The re-emergence in the 1970s of finance capital to global power is also the re-emergence of financial instability and crisis. This is particularly so since the 1994-5 Mexican peso crisis. Finance capital likes instability most of all, because that is how it makes the biggest bucks. As the Financial Times observes,
"trade gaps, budget deficits, the rise of emerging markets, portfolio allocation, deflation in Germany, the orderly decline of the US dollar and European interest rates. Each of those variables is another possible route to making money, and currency traders have been minting it this year"
Can't make money sitting on your duff day-trading? How does speculating on a 10% swing in currency values sound for making sweat-free money?

And by the way, what ever happened to that old phrase "unearned income" anyway?


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