THE US dollar, reflecting the crisis of the US capitalist economy, is now sinking fast against both the euro and the pound sterling.
Rising UK and EU interest rates have seen the euro rise to $1.38 while the pound is now worth more than $2 for the first time for very many years.
The US economy and the federal government are both in massive deficit.
While China is making record trade surpluses in its trading relations with the US, the US economy as a whole was $763 billion-plus in the red in 2006, with imports from China and other countries dwarfing US exports.
In the first six months of 2007 China recorded a $112.5bn trade surplus with the US, and expects to more than double this in the second half of the year. Meanwhile, the US federal government expenditure was over $248 billion in deficit in 2006.
The answer of the US bosses and government to this raging crisis has been and is to furiously attack the US working class, and the working class of the world.
Bush is seeking to privatise social security while the US bosses have embarked on a class war with the working class. Previous US industrial world beaters, Ford, GM and Chrysler are in desperate straits.
They are sacking tens of thousands of workers, and making use of the US trade union bureaucracy to cut their wage bills by up to 50 per cent, while dumping their health care responsibilities.
Internationally, the US ruling class has sought to relieve its crisis by seizing the oil and gas resources of Iraq and central Asia. However, it has suffered ignominious and total defeat in its struggle with the Iraqi workers and poor.
The US army has been strained to breaking point while the US exchequer has had to spend over 400 billion dollars on a war which up to now has served to illustrate how the best trained, equipped and organised of imperialist armies cannot stand up to the revolutionary force of the masses.
Now this entire crisis, including the inflationary consequences of massive rises in oil and gas prices, is feeding back into the US and disintegrating the Bush regime.
The period of the American bourgeois dream of imperial domination has given way to a nightmare of mammoth proportions as the collapse of the US housing market, especially its sub prime mortgage market, causes widespread bankruptcies and threatens to undermine the holy of holies of US capitalism, the banks themselves.
It is also an end of an epoch for the US working class which now knows that its illusion of being a new ‘middle class’ has been shattered. It is having to rediscover how it raised its standard of life in the first place – through the prosecution of the class struggle, and pitched battles with the US ruling class.
Its current mis-leaders, the trade union bureaucracy, have been forced to rediscover a crude form of internationalism.
Being completely unprepared to defend the jobs of workers in the US motor car or other industries, they have had to go to China to speak to the Chinese trade unions with a view to urging them to push up wages to try to ‘save’ US jobs.
The US workers will go far beyond the limited gestures of the trade union bureaucracy. They will defend their jobs with sit-ins and occupations, and rapidly rediscover the revolutionary socialist programme for the expropriation of the bourgeoisie which was a power in the US, before, during and after the Second World War.
What faces the US workers is breaking with the Democrats, forming a Labour Party, and developing a socialist programme for the revolutionary transformation of the US, in alliance with the working class of the world.
For this task the US workers will require a revolutionary party. US Trotskyists must form a section of the International Committee of the Fourth International at once. This will lead the struggle for workers power in the US and for the victory of the world socialist revolution.