10/25/08 Could the Us emerge more powerful from the financial mess?

one outline of the world, post-financial mess, begins to show a resemblance with
the recession of 1981-82. during that previous period of recession, the monetarist
policies of Volker's Fed pushed up interest rates on the dollar to unprecedented
levels, approaching 18%. Volker's policies were aimed to break the pressure of
stagflation, high inflation and stagnant output, on profit rates which in turn,
threatened the dollar's preeminent role in global economies.
certainly, today's dollar interest rates of 1.5% speak to a completely different
fed approach to econ unstability. but in both cases we see a radical strengthening
of the dollar. in the first case, as a result of record high interest rates and in
the second due to a global panic rush to the perceived relative safety of the
dollar.
Contrary to some progressive evaluations, this strengthening of the dollar could
greatly increase us power as the greatest pain is felt in collapsing emerging
markets around the globe, decimated by outflows of foreign investment. the us
economy, the undisputed locus of the crisis, would appear positioned to emerge from
the crisis in a better position than before the mess, able to take advantage of the
crisis situation in the developing world. strengthened american banks and their
industrial clients, can expect to profit greatly from the wreckage of foreign
economies.
the developing world and europe must extract some punishment of the us economy and
the dollar should be the target. the imf must support emerging market currencies
without preconditions in most cases.