Steve Quayle News Alerts

May 12, 2002
Source: FAZ,

featuring an interview to that effect with Goldman-Sachs Chief Economist Thomas Meyer.

Meyer said the dollar is clearly overvalued, and said people "should not be blinded" by experts who say a dollar collapse is not to be expected.

"The situation with the currency is like that with stocks," he said. Just as the stock bubble collapsed, so "the dollar will go down, to a reasonable level." When will this happen? "It is hard to predict exactly," said Meyer, "but the situation is increasingly precarious. America needs $2 billion each business day to cover its current account deficit... Soon no foreigners will be buying U.S. stocks."

FAZ goes on, in an accompanying article entitled "The Dollar is sliding," to detail the reasons for a reversal of the capital flows into the U.S.

"The books of U.S. companies look terrible. There are faked balances, record write-offs, the menace of bankruptcies.... Remember the second half of the 1980s, when the dollar lost half of its value in 3 years.... Nobody knows when the dollar will drop to its knees, but when it happens, the fall will be fast and violent," concludes FAZ.

[Source: Die Welt]

THE EURO IS INDEED A `TEURO', writes the German daily Die Welt, in a biting expose of the official German government Statistical Office's cover-up of the huge wave of inflation, triggered by the introduction of the Euro (the expression "Teuro" is a play on the German words "teuer" or "Teuerung", meaning "expensive" and "price rise," respectively).

Die Welt notes that "the German population is boiling with anger" at the realization, that with the introduction of the Euro "everything has become more expensive."

Indeed, anyone living in Germany knows from painful experience, that present prices of goods, following the transition to the Euro at the beginning of the year, are routinely 10%, frequently 30% and often even 100% higher, in DM equivalent, than prices for the same goods at the end of last year.

Die Welt lists a whole series of examples, including especially food prices, where often today the Euro price for a head of lettuce and many other foodstuffs, has the same numerical value as the DM price-tag had 6 months ago--although the Euro-to-DM ratio is about 2:1!

Die Welt quotes Heinz-Peter Hannappel, responsible for price and inflation statistics at the German Statistical Office, admitting that his friends and neighbors have been "cursing me out" for the failure of official statistics to acknowledge the monstrous price inflation of recent months.

In fact, the latest official statement of the Statistical Office on consumer prices, outrageously asserts that "the transition to the Euro for cash payments has had no significant influence on the overall consumer price index."

This result was obtained by processing the inflation data to remove so-called "special effects."

Faced with German citizens' "foaming at the mouth in rage" at the effective 30-50% increases in parking fees, food and restaurant prices and many commercial products, Hannappel now admits, that the Statistical Office has to make a "closer study" of the situation.

Here is something to think about, for any fool who believes in the authority of "official figures."

The Euro-triggered burst of inflation, confirms that enormous inflationary pressures have built up in the European and world economy, waiting to burst out into the open whenever a suitable opening is provided.

`THE U.S. DOLLAR IS SURE TO FALL: IT'S NOT A QUESTION OF IF, BUT WHEN,' reads the headline article for the business section of the Toronto Globe and Mail for May 3, by Drew Fagan, writer of the "Big Picture" column.

The article begins, "It can't defy gravity forever...," and continues by reviewing the U.S. current account deficit, etc.

"Things won't change overnight. But when the turn comes, the global economy will be affected in a big way. As for the timing: Most likely some time in 2003. Economists might call that the short end of the medium term."

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