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The Great Depreciation -
The Selling Of America

By Gerald Celente
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, Winter 2008.)
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 bailouts.
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
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© MMVIII The Trends Research Institute
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