W Joseph Stroupe, "Dollar's wounds re-open," Asia Times, June 5, 2009.

[W Joseph Stroupe edits Global Events Magazine. I guess Strategic Forecasting Expert is his day job. Here he provides a narrative of what's been happening in the banking system, the markets and the real economy--without numbers. Most of the numbers are dates. So there's a minimal list of moderately technical terms. The narrative is how it gets told, how we say it to ourselves, our communities and other circles. Inside the numbers somewhere. Can the dollar stem its losses and hold onto what remains of investor appeal? Could it even recover its losses? Read on. -jlt]

"Be careful what you wish for, you may receive it." The adage applies well to the US Federal Reserve as it enters what may turn out to be an entirely new and more dangerous phase of the financial and economic crisis that is still firmly centered in the US - notwithstanding the ongoing Wall Street rally and increased hopes that the worst is now over.

The Fed wished away the hysterical risk aversion reflex of global investors, which came to a head in autumn 2008, when big Wall Street banks collapsed, sending shockwaves around the globe. The position of Fed officials is, after all, that this is a crisis sparked mostly by panic-stricken investors who've artificially driven the value of America's innovative financial assets far below their true values, wrongfully smearing massive sums of such assets with the label, "Toxic!"

It seems that Fed officials don't want to see the full and stark truth about how global investors are rapidly losing confidence in the US fiscal position and in the dollar.

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