Just words? Not when its my money!

[ericire12]

http://hotair.com/archives/2009/03/25/fumble-geithner-speaks-dollar-dives/

Geithner speaks, dollar dives

    In a blink of an eye, the U.S. dollar has collapsed against the Euro, Japanese Yen and other major currencies. The trigger was comments from Tim Geithner who said that the U.S. is “quite open” to China’s suggestion of moving towards a Special Drawing Right (SDR) linked currency system. If the world adopts the SDR, which was created by the IMF as an international reserve asset, it would mean that countries around the world would need to hold less U.S. dollars. The U.S. is probably open to this suggestion because a weaker dollar is stimulative for the U.S. economy and would relieve the U.S. from having to implement effective monetary policy while balancing the international demand for a reserve currency.

    Geithner’s comments indicate that the U.S. is not taking China’s suggestion with a grain of salt and instead is giving it legitimacy. This is extremely important ahead of the G20 meeting. The only question is whether this is another amateur mistake by the new U.S. Treasury Secretary.

The dollar pared losses versus the euro on Wednesday after U.S. Treasury Secretary Timothy Geithner said the dollar was likely to remain the world’s reserve currency for a long time.

The U.S. dollar fell to a session low against the euro after Geithner said he was “quite open” to China’s suggestion of moving toward SDR-linked currency system.

These contradictory statements are clearly the act of an amateur Treasury Secretary that has been thrust onto the public forum and is struggling with the need to be very particular in his choice of words. Geithner is learning the hard way about the impact that his comments can have on the currency market and despite his attempt to pacify investors, his words have left air of uncertainty in the U.S. dollar.

On the job training you can believe in!

[jnevis]

Hey Joe Public!  Hate to say we told you so but....

Inexperienced President and SecTres giving the US up to the Chinese, what a way to go

[Hazcat]

I'm not usually one of the 'tin foil hat' crowed but IF I had any money right now I'd be buying gold (and silver).   The dollar is lost.

[fightingquaker13]

Actually the article is correct. It wouldn't necessarily be a bad thing for us all the way around. Yes the price of imports, particularly oil would go up, and this is bad. At the same time, though it would free up our monetry policy (maybe good,maybe bad depending on who's making it, don't want to be Argentina circa 1985). It would also boost exports from here, and help manufacturing and agriculture. The big downside to me would be a fall off in foreign investment partiicularly in T bills.The strange thing about this is that the people it would seem to screw are the Chinese. Because they devalue the yuan to artificially low levels in order to make their exports cheaper, you woud think an international hard currency and a weak dollar would be the last thing they'd want. Then again I'm not an economist, or maybe they're just thinking (very) long term and want to weaken US influence the Pacific a couple of decades from now.  It seems Geithner should take one lesson from Greenspan, and master the fine art of shutting the hell up, unless you've planned out what you want to say.
fightingquaker13

[ericire12]

No, its not a good thing.

One of the major problems with our economy right now is that the dollar is worth so little compared to the euro and the pound. Thats why $4 a gallon gas hurt so badly. It also turns the screws even tighter on those who are trying to stay in their homes, or trying to scrape up enough money to pay the power bill or go buy groceries. It magnifies every economic problem facing us on both a Macro and Micro level.

If this is Geithner's monetary policy, he is dumber then we thought, and things are going to be a hell of a lot worse then we thought. Pissing on the dollar is not the way to get us out of this mess.

[Sponsor]

[Rastus]

I'm not usually one of the 'tin foil hat' crowed but IF I had any money right now I'd be buying gold (and silver).   The dollar is lost.

Not a tin foil hat.  China's military think tank suggested last year that they could call in our debt and crash our economy...they just aren't ready yet.  A few more weeks/months of BHOZO and his buds you never know.  Actually, things should get better in the near term and really start to see inflation late in the year....though it may be a few months before you can actually go back and peg it as a trend start date.  I'm hoping to time this thing out, sell my house and buy into a bit of property and build a house.

That having been said, our one great fiscal strength, the dollar is now becoming monopoly money.  There are serious challenges to the dollar being used as an international standard of exchange...that is why we have been able to maintain real economic power in a nation that produces...not so much.  Monetize the debt...great...that means print money..look at history, Europe has done it (South America does it a lot) and you can see the results if you just look...or just consider a nation's standard of living.

Boys and girls...we're going to see change for sure.  We will slow down importing..heck we won't be able to afford much because our dollar will be of low value.  Then there will be a terrible squeeze on the industries and people who actually produce something to fund the ones who shuffle money around and creat nothing (read service industries, accounting/bookkeeping, lawyers. politicians, shrinks, etc..).  The rich are still getting richer by means of the democrats this time and are being further protected and insulated by the laws being passed...the same ones that are going to empty your pockets.

Gold, silver, lead...the triad of precious metals. 

[fightingquaker13]

No, its not a good thing.

One of the major problems with our economy right now is that the dollar is worth so little compared to the euro and the pound. Thats why $4 a gallon gas hurt so badly. It also turns the screws even tighter on those who are trying to stay in their homes, or trying to scrape up enough money to pay the power bill or go buy groceries. It magnifies every economic problem facing us on both a Macro and Micro level.

If this is Geithner's monetary policy, he is dumber then we thought, and things are going to be a hell of a lot worse then we thought. Pissing on the dollar is not the way to get us out of this mess.

I agree. I think on balance moving away from a dollar standard is a bad thing. If it were 1965 outside when we still had the largest industrial base in the world, a weak dollar could be seen as a blessing. Not anymore. The oil spike was due to a weak dollar. Its come back down not just due to decreased demand,but because people are putting their money in the US to find shelter. I was just saying their is an argument to be made for the other side, I just don't think its convincing. Hell, one of the things I used to debate my GOP friends was that when Bush took office the Euro was worth $0.98, whenhe left it was worth $1.40. If you'd just bought Euros and stuck them in a drawer you'd have almost doubled your money in eight years. Wish I'd done it.
fightingquaker13