The significant fall of dollar all over the world, also in Brazil but specially compared with Euro may be the most relevant in course in the so-called global economy. On May 9th, Friday, the North American currency ended up the week costing only cents (86,9) of its main European rival which accumulates a 9% increase this year and close to 30% along the last 12 months. Such strong devaluation indubitably expresses the extraordinary instability of our days and indicates the exhaustion of dollar standard and of its hegemony in force since the end of World War II/post-War.

The economic effects of the depreciation are contradictory. In the track of the falling dollar there are losers and winners left. The former ones are generally exporting companies doing business with the North American market, for the time being the biggest one in the world, as well as the investors in economic assets; the latter are importers and mainly who has debts in dollar. The general result is predominantly positive to Brazil, since we have already attended to the real devaluation of the external debt and liabilities - consequently softening the notorious external vulnerability and also the inner public debt (partially based on dollar) , as well as a certain dilution of the inflationary pressure. It is a movement that benefits to the internal market, making possible an increase of the domestic consumption and a less painful external adjustment. It's a relief.

A poorer and weaker Uncle Sam
On the other hand, the weakening of the hegemonic currency before what it seems to be its today main opponent doesn't impress positively the northern American continent. It is a sign of weakness and certainly means real fall of the value of financial assets ballasted in dollar, and an impoverishing of those who inhabit in Uncle Sam's land. The devaluation denotes inflation and decrease of the purchasing power in the foreign markets and, therefore, the relative wealth this currency expresses by means of exchange.

It is worthy reminding that money, in despite of all its mystery and fetishism, keeps being a mere equivalent to goods, no doubt the most general and sophisticated of all the equivalents reported by the economic history, but yet a mere equivalent, as stated by two renowned Political Economics classics Adam Smith and Karl Marx. If its always relative value decreases that means that its owner - in this case the dollar, the USA - may acquire less wealth or fewer goods than before or, in other words, the owner got poorer. Thus, common sense first sight impression is that currency depreciation is a sign of weakness is in agreement with the essence of facts.

The powerful dollar policy has failed
Let us remember that George Bush began his government defending the policy for a powerful dollar adjusted to a ferocious imperialist offense that has been marking his administration. Last year the former USA Treasury Secretary Paul O'Neill O'Neill repeatedly and clearly announced this intention; then he quitted his position, an attitude probably provoked by the consecutive failures of his own initiatives coordinated with central banks' in Europe and Japan, defending the dollar.

Nevertheless the USA currency went on free-fall. There are left in press media files by statements about that foredoomed policy which apparently has been abandoned.
It has also been told that the Bush government's opposition to Irak's initiative of exchanging its dollar reserves for Euro would have been an additional cause to the Gulf War. Being this hypothesis true or not is beside the point. The fact is that the conflict has not strengthened the imperial currency hegemony. On the contrary, the incitement to the tensions with Germany and France has not contributed to united transatlantic actions in the field of foreign exchange and monetary. The maintenance of high interests rates in the European Union compared to the USA rates - as decided by the European Central Bank last Thursday, May 8th - has been being appropriately designated as an extra reason for the dollar recoil before Euro.

The annual 2,5% basic interest rate in EU (a knick knack compared to Brazilian 26%) is not lined up to North American 1,25% a year. And this is not good to dollar health. Maybe European leaders are realizing from a larger historic perspective that a powerful Euro strengthens European powers the same way it weakens Uncle Sam's leadership and economic hegemony, although in the short term its effects are controversial for they compromise the exports goals and the current surplus.

Maybe, as common sense suggests (in a rare case of coincidence between the phenomenon appearance and its essence) the decline of the dollar may and should be understood as a trustable extent of the U.S. economic decadence that is clearly in course contrasting with an unquestionable military supremacy. Still, it is a monetary matter and so it is only a reflex of the deeper and most relevant disturbs in the production system or in the empire's real economy.

Commercial deficit is the main cause
The most remote origin of the dollar weakening is the commercial deficit accumulated in a three-decade period - it's not a coincidence - also constitutes the most perfect expression of the imperial parasitism. And according to Lenin that phenomenon unavoidably leads the hegemonic powers through a path towards economic decadence and decomposition.

However, the most immediate cause to devaluation is the extraordinary reduction of the foreign investments in the United States. If it doesn't characterize an escape of capitals yet, it's not far from that. Statistics about foreign direct investments in 2002 reveal that for the first time in history China has attracted more resources in this field that the USA, while a report by the Clearances World Bank released in the end of that year detected an incipient and growing transfer of financial assets from dollar to Euro.

If it is true as experts say that in moments of crisis money migrates in search for "security" - there is a run for security proportional to the aversion to risk - the flow turn of the foreign investments in course since last year at least indicates that the great investors no longer see the United States as a safe place for their business.

The economist Joseph E. Stiglitz has already said there is no lack of reasons to consider the North American assets not much attractive ant trustable, besides George Bush's (the son) arrogance... Think about the decline of the stock markets and the bankrupt of imperial business groups, specially those created and supported by the "New Economy" illusions, whose fall meant a heavy destruction of capitals estimated in some trillion dollars. But it is not all that counts.

The difference between the Europe' and United States' interest rates is the other relevant cause to the preference for Euro, and as a consequence the depreciation of dollar. In fact, higher European interests than the USA's mean an offer of a most generous reward to the investors in bonds designated in Euro compared to the ones in dollar.

The search for higher profits granted by interests differential, allied to the escape of "New Economy" losses stimulates the migration of the capital invested in the United States to Europe. The relative importance of dollar tend to decline not only as means of payment but also as reserve and measure of value, including due to political factors, as it may suggest Irak's decision under Saddam Hussein (to exchange the country's reserves in dollar for Euro) and proposals being accepted among OPEC's members to use the European Union's currency to the detriment of dollar as reference for oil prices.

The Empire's fragility
We should register that none of these aspects would affect dollar so much if our imperialist neighbor's external account were a little more equilibrated. That's not the case. Frightening deficits in commerce and current accounts generate a fantastic necessity of financing the United States' balance of payments, costing around US$ 1,5 billion a day. The role in the current transactions already represents nearly 5% of the greatest GNP in the planet, and it will likely push forward even more this year if the market itself does not impose an external adjustment. Besides, sooner or later the falling of dollar will bring about the reduction of imports, having interesting consequences over commerce and the global flow of capitals.

It's known that such deficit in the current account is not sustainable in medium term and denotes a crisis of the balance of payments in any country of the world. The USA balance of payments finished 2002 in red, with a negative balance of US$ 45 billion, precisely because the U.S. were not able to captivate abroad capital enough to settle the commerce and current account debts. Once the available reserves in FED were not that much, the balance was probably closed with issues. The special position dollar holds in the international financial system grant North Americans this privilege.
The USA is nowadays the only country in the world that can pay its debts and external commitments using its own currency as mean of payment and, as a last resort, issuing it. But we shall not think that this is free of costs. In a market saturated with dollar and where investors greedily seek options for their savings, the price for new issues is more and more devaluation. Although it may not seem, the great northern empire with military power facing no match in the world, possesses a contrasting "fragile economy", quoting again 2001Nobel Prize in Economics winner Joseph E. Stiglitz. The external deficits, and in particular the commercial deficit explains the weakness of the empire and its staggered currency.

The necessity of external financing means dependence on foreign capital to settle the balance of payments. In despite of the special position of dollar this economic truth does not apply only to countries like ours. It is idealistic foolishness imagining that North American State has the power to control the flow of capitals, that is, to take on control over the movement of capital that persists anarchic and centralized by the capitalists themselves and not by the capitalist State's institutions nor by the central banks - despite the relevance of the interference done by FED and central banks in Europe and Japan in dollar defense.

For this reason - and also due to the necessity of financing the Brazilian balance of payments pushes the exchange market, and in moments of crisis it provokes the depreciation of real - in the USA the need for external financing has similar effects and must be associated with the fall of dollar, by the way as various economists do.

The victory of anarchy
The exasperated volatility of the exchange markets is no longer an exclusive privilege of the poor countries in Latin America, Asia, Africa and Eastern Europe. The dollar trajectory regarding Euro and yen in 2001, 2002 and this year proves that he instability of the exchange markets in the biggest financial centers is a recurrent drama that forms perhaps the main kind of manifestation of the world monetary crisis, which can be identified as the crisis of the dollar standard, the crisis of dollar hegemony.

Interference in dollar defense - that in 2001 put into circulation hundreds of billion dollar - was the result of the powerful dollar policy proclaimed by former Treasury Secretary Paul O'Neill, who only denied it in the eve of his own resignation when it was more than obvious his and Bush government's fiasco in that field. The intervention has likely avoided a worse collapse of the North American currency unit, but failed in its objectives, World War I These interferences has probably avoided a deeper collapse of American currency, but they surely failed in their aims - since as already occurred with the Sterling pound during the post-war period - the American Dollar revaluation has not been successful.

The facts (the decline of dollar and the valorization of Euro and yen, in spite of the coordinated policy of central banks) inlay a lesson on Political Economics that we should not neglect: no matter how powerful they are the central banks don't have total control over exchange flotation; and they have less control in a free exchange order (or would it be disorder?) where currencies float basically at the market's mercy, by the private supply and demand that through the flow of direct and indirect capitals put into circulation a more relevant amount of resources than the reserves kept by central banks and, for this reason, they simply can't be controlled by those institutions.

Nowadays, as in Karl Marx's age, anarchy is still the queen that in last resort and despite the expansion of the governmental expenditures as a proportion to GNPs and the State Monopolistic Capitalism indicates the directions and leads the steps of the capitalist economy. It could not happen in a different way. Important as it may be, the institutional policy - even in the most powerful and hegemonic country - has no power facing the economic crises of the capitalist system. Today, as in the early days, those crises have an objective character and do not depend upon the Prince's will, or, in our case, on President George Bush.

The anti-cyclical measures lose effectiveness, the manipulation of interest rates (which are in the USA the lowest for the last 42 years, but don't stimulate investors nor stop the unemployment increase), as well as interventions in exchange markets seem to be powerless before the crisis, and in some cases have made the problems worse. If there is to be learned some relevant lesson based on dollar declining trajectory is that the will of markets, even blind, has overlaid the governments' economic policies and the capitalist State by proclaiming the victory of anarchy. After all, isn't this the recipe neoliberalism suggests and imposes? The remaining question is if it will survive its own medicine.

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*Journalist, Member of Unique Central of Workers (CUT) Communication Team.