The dollar headed for the biggest weekly loss against the euro since December after Federal Reserve Chairman Ben S. Bernanke signaled the bank may cut interest rates further to avert a recession.

(click play on video below to see more…)

the following is an excerpt of Feb. 15 (Bloomberg) article by By Stanley White and Kosuke Goto– “The dollar headed for the biggest weekly loss against the euro since December after Federal Reserve Chairman Ben S. Bernanke signaled the bank may cut interest rates further to avert a recession.

The currency traded near a one-week low versus the euro as Bernanke said the Fed “will act in a timely manner as needed to support growth.” The allure of U.S. assets diminished as the yield premium of European government bonds over Treasuries widened to the most in more than a week.

“The dollar will remain weak today after Bernanke’s speech,” said Motonari Ogawa, vice president of interest-rate products and foreign exchange in Tokyo at Morgan Stanley, the second-largest U.S. securities firm. “The U.S. yield disadvantage is increasing. I was about to turn into a dollar- bull, but I’m now rethinking it.”

CNNMoney (See original article here.) By Brian O’Keefe, senior editor, quoting Jim Rogers on the US economy right now:

“Conceivably we could have just had recession, hard times, sliding dollar, inflation, etc., but I’m afraid it’s going to be much worse,” he says. “Bernanke is printing huge amounts of money. He’s out of control and the Fed is out of control. We are probably going to have one of the worst recessions we’ve had since the Second World War. It’s not a good scene.”

(The central bank’s second interest rate cut in a week raises the risk of inflation and bails out the banks.)

(Interest rate cut=increased money supply=inflation=hard times for poor and working families)

Rogers looks at the Fed’s willingness to add liquidity to an already inflationary environment and sees the history of the 1970s repeating itself. Does that mean stagflation? “It is a real danger and, in fact, a probability.”

Great explanation of what is going wrong with our economy and why we should be upset on behalf of the people and the founding fathers:

GM offers buyouts to entire unionized workforce after $722 million loss in forth quarter; record $38.7 billion loss for the year in 2007

Published: February 13, 2008 in the New York Times: (see entire article here.)

“DETROIT — A surprisingly tough fourth quarter and a gloomy outlook for the United States market prompted General Motors to offer buyouts Tuesday to its entire unionized work force.

CNBC: Rick Wagoner, G.M. Chief, on Earnings

G.M.’s latest “special attrition program” covers all its 74,000 hourly employees and underscores the challenges it faces in its turnaround effort.

G.M. said Tuesday that it lost $722 million in the fourth quarter and a record $38.7 billion in 2007, although the annual loss was inflated by a one-time charge of $38.3 billion to write down deferred tax assets.

Still, few involved with the industry had predicted that G.M. would begin another companywide program to shrink its payrolls.

“A buyout that broadly based is a surprise and a very bold statement about the condition of the American auto industry,” said Harley Shaiken, a labor professor at the University of California, Berkeley.

G.M.’s buyout package follows a similar one made by Ford Motor, which last month extended offers to its 54,000 workers represented by the United Automobile Workers. Chrysler has offered buyouts to workers at certain plants.

G.M.’s chief financial officer, Frederick A. Henderson, called the buyouts “an important step” in the reorganization of the troubled domestic auto industry.

The company has already cut nearly 40,000 United States jobs in the last two years through buyouts and early retirements and has closed a number of plants to bring production in line with weaker demand for its vehicles.”

Interesting video of Congressman Ron Paul explaining Our Founders’ Constitution and the insidious transfer of wealth form poor and working class to Corps. and banks via “inflation tax” to Federal Reserve Chairman Ben Bernanke

Ron Paul explaining these things to Fed Reserve Chairman Ben Bernanke:

Recent news montage of sliding dollar and dangerous fiscal policy of Federal Reserve to protect banks:

China’s latest export to the US: Inflation.

Published: February 1, 2008

inflation graph

SHANGHAI — China’s latest export is inflation. After falling for years, prices of Chinese goods sold in the United States have risen for the last eight months.

Soaring energy and raw material costs, a falling dollar and new business rules here are forcing Chinese factories to increase the prices of their exports, according to analysts and Western companies doing business here.

The rise was a modest 2.4 percent over the last year. But even that small amount, combined with higher energy and food costs that also reflect China’s growing demands on global resources, contributed to a rise in inflation in the United States. Inflation in the United States was 4.1 percent in 2007, up from 2.5 percent in 2006.

Because of new cost pressures here, American consumers could see prices increase by as much as 10 percent this year on specific products — including toys, clothing, footwear and other consumer goods — just as the United States faces a possible recession.

In the longer term, higher costs in China could spell the end of an era of ultra-cheap goods, as well as the beginning of China’s rise from the lowest rungs of global manufacturing.

Economists have been warning for months that this country’s decade-long role of keeping a lid on global inflation was on the wane.

“China has been the world’s factory and the anchor of the global disconnect between rising material prices and lower consumer prices,” said Dong Tao, an economist for Credit Suisse. “But its heyday is over. We’re going to see higher prices.”

“…In the meantime, makers of toys, apparel and footwear — highly labor-intensive industries — are being forced to consider raising prices even as growth in the United States slows, a rare confluence of events not seen in decades.

Companies that began outsourcing production to China in the 1990s mostly benefited from lower costs, which translated into both higher corporate profits and lower consumer prices. Now, many Western companies have to rethink pricing.

“Companies are now ordering for the spring of 2009,” says Nate Herman, director of international trade at the American Apparel and Footwear Association, based in Arlington, Va., that represents some big clothing and footwear makers. “Factories are coming back and asking for 20, 30, 40, 50 percent price increases.”

Will importers pass those costs on to consumers? “It’s going to be hard to avoid some increase,” he said.”