“AHH, SPEAK ENGLISH, YA DUMB STOOP”

3/27/08

Today’s Wall Street Journal reports that countries on the periphery of Europe (The Journal specifically cited, inter alia, Latvia, Iceland, Romania, and Hungary.) are raising interest rates while the Federal Reserve here in the U.S. is cutting rates. Why? The Journal did not cite, as would the Insightful Pontificator, the good sense of those foreign central bankers and their focus on their key mission of controlling inflation while Obsequious Ben sees his key mission as pleasing the free marketeer Wall Street tough guys who got themselves into a whole heap of trouble and now need the mother’s milk of federal help to keep them in their Allen Edmonds and their Ferraris, but I digress. Instead, the Journal says those countries “…need high interest rates to attract the investment and credit from abroad that pays for their huge deficits in trade and other foreign income…”

Hmm…

What other country must “…attract the investment and credit from abroad that pays for (its) huge deficits and other foreign income…”? That’s right—the United States of America. While we don’t have the same currency problems those “periphery of Europe” countries have (They are borrowing, in most cases, in foreign currencies and thus would see their liabilities in their domestic currencies increase should their currencies depreciate.), we also must borrow heavily abroad to finance our federal deficit, our homes, our extravagant vacations, expensive cars, $200 + nights out, $300 pairs of shoes, $200 ties, $1,000 suits, and the other necessities of life we expect foreigners who work for perhaps $10 per week to finance for us. And yet Obsequious Ben and his accomplice Hank Paulson continue to follow a “dollar be damned policy” and count on foreign “investors” (increasingly foreign central banks since foreign private investors are onto us and the central banks have little choice at this juncture) to be as financially foolish as your typical American consumer, or your typical Wall Street seven figure financial wunderkind.