^{Originally published by Institute for Political Economy}

Is the “fiscal cliff” real or just another hoax? The answer is that the fiscal cliff is real, but it is a result, not a cause. The hoax is the way the fiscal cliff is being used.

The fiscal cliff is the result of the inability to close the federal budget deficit. The budget deficit cannot be closed because large numbers of US middle class jobs and the GDP and tax base associated with them have been moved offshore, thus reducing federal revenues. The fiscal cliff cannot be closed because of the unfunded liabilities of eleven years of US-initiated wars against a half dozen Muslim countries–wars that have benefited only the profits of the military/security complex and the territorial ambitions of Israel. The budget deficit cannot be closed, because economic policy is focused only on saving banks that wrongful financial deregulation allowed to speculate, to merge, and to become too big to fail, thus requiring public subsidies that vastly dwarf the totality of US welfare spending.

paul craig roberts

Today the Swiss franc made yet another new high against the super dollar, as it has been doing for 120 days. What you are reading in the graphs is less and less of the foreign currency that one dollar can buy. Of course, gold and silver also consistently hit new highs. Swiss franc:

As did the Australian dollar:

China is at it once again, to remove the dollar as the world reserve currency and they are bringing their pals, India and Russia to join in.

China will push reform of the international currency system to make it more diversified and reasonable, and to reduce excessive reliance on the current reserve currencies, the People's Bank of China said Friday.

"To avoid the shortcomings of sovereign credit currencies acting as reserve currencies, we need to create an ... international reserve currency that can maintain the long-term stability of its value," the PBOC said.