Friday, October 2, 2009

Mr. Geithner and Mr. Bernanke Support the Dollar?

“Top U. S. officials threw their weight behind the dollar Thursday, with the Treasury chief stressing the importance of a strong dollar and the Federal Reserve chief addressing concern about the greenback’s future as a reserve currency.” (Wall Street Journal:

What was the name of the Treasury Secretary…O’Neill? Or, was it Snow? Or, was it Paulson?
Oh, well.

And the Federal Reserve chief…that was Greenspan, wasn’t it?

And the value of the dollar dropped more than 40% against other major currencies!

Oh, that was the Bush (43) Administration.

When it comes to international confidence in a country’s currency, the officials of that country’s government must not just “Talk the Talk”, they must “Walk the Walk”!

Don’t watch the lips…keep your eyes on the hips!

Talk, talk, talk, talk…

Federal deficits growing out into the future in the neighborhood of $10 trillion or more!

Monetary policy where the banking system averaged excess reserves of $855 billion for the two weeks ending September 23, 2009! And, in a banking system where required reserves averaged only $60 billion for the same time period.

After nine years of promises from different Treasury Secretaries and from two Chairmen of the Board of Governors of the Federal Reserve System why is there no credibility in these statements?

The value of the U. S. Dollar is down against the Euro by about 11% since January 20, 2009 and the value of the U. S. Dollar against major currencies is down about 10% since January 20, 2009.

The report card given this administration by international financial markets is not good.

My guess is that the value of the U. S. Dollar will continue to fall over the next year or two and will continue to fall until participants in international financial markets see some action on the part of the United States Government and not just empty talk from its Treasury Secretary and the Chairman of its central bank.

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