January 27, 2008 (LPAC)--Another Federal Reserve rate cut will destroy the dollar, wrote British Sunday Telegraph financial columnist Liam Halligan in his column today. Halligan's analysis reflects a part of the analysis of Lyndon LaRouche's Jan. 25 call for the Federal Reserve to defend the dollar from British-orchestrated attack, by implementing a two-tier system which raises interest rates above that of the ECB on the open market, while providing a protected price for long- to medium-term credit in protected categories such as household mortgages.

Halligan, while supporting central bank rates cuts, says that what Bernanke did on Jan. 22 "just whipped up hysteria," and that "The Fed also destroyed any remaining claim it had to inflation-fighting credibility. It has a dual mandate, of course: targeting both inflation and output. But to cut rates so deeply when inflation is at 4.1 per cent - a 17-year high - throws any pretence of caution to the wind."

Now, Halligan goes on, the "smart money is betting on another 50-75 point cut by the Fed on Wednesday. ... But if Bernanke lowers US rates sharply again this week, the currency markets will see the dollar as a one-way bet. In that case, the world's reserve currency would fall off a cliff, sending inflation sky-high, sinking America into a fully-blown slump and causing havoc across the global financial system."