Playing monetary Chicken.. Warning Warning Collision Immanent

iamnothere 2010/11/11 17:44:54
Greenspan warns over weaker dollar

By Alan Beattie in Seoul

Published: November 10 2010 23:00 | Last updated: November 10 2010 23:00

The US is pursuing a policy of weakening its currency which is driving up exchange rates in the rest of the world, according to Alan Greenspan, the former chairman of the Federal Reserve.

Writing in today’s Financial Times ahead of the G20 meeting in Seoul, Mr Greenspan argues that with China also holding down the renminbi, the upward pressure on currencies elsewhere risks a return to widespread trade protectionism. Mr Greenspan criticises China for continuing to prevent the renminbi strengthening, saying it reflects a misguided view that a weak currency is necessary for export growth and political stability. “China has become a major global economic force in recent years,” he writes. “But it has not yet chosen to take on the shared global obligations that its economic status requires.” More unexpectedly, Mr Greenspan adds: “America is also pursuing a policy of currency weakening.”

Mr Greenspan does not specify which agency in the US system is implementing policies to weaken the dollar, but his words are likely to be seized on by critics of the US Federal Reserve. Governments around the world have complained that the Fed’s recent move towards pushing more dollars into financial markets is creating destabilising capital movements and pushing up exchange rates elsewhere. In the US system, formal responsibility for exchange rate policy lies with the US Treasury. Tim Geithner, Treasury secretary, has always maintained that the US’s policy of a strong dollar is unchanged, though the Treasury has never specified what value that implies.

Ben Bernanke, Fed chairman, recently defended his actions and said he was fully aware of the global importance of the dollar.

“The best fundamentals for the dollar will come when the economy is growing strongly,” he said.

Speaking in London, Mervyn King, the governor of the Bank of England, also expressed concern that failure to address the issue of imbalances could create the conditions for a new financial crisis.

“If we end up 12 months from now with countries taking protectionist measures, everyone will suffer. I think the absolute imperative for this weekend [at the G20] is a clear demonstration that every member of the G20 recognises that the imbalances are a problem .If we don’t do that then I fear the next 12 months will be an even more difficult and dangerous period than the one we have been through,” said Mr King.
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  • dlsofsetx 2010/12/03 02:31:00
    Shades of Weimar Germany.
  • iamnothere dlsofsetx 2010/12/03 14:18:00
  • Don Leuty 2010/11/12 01:01:31
    Don Leuty
    TurboTax Tim Geithner, himself, is enough to cast doubt on exchange policy.
  • harry 2010/11/11 23:15:47
    A Weaker Dollar is nothing to warn about its a solution to be competitive for exports.
    If money printing goes on then the dollar must get weaker, but why is real estate not rising like gold or commodities? (Back to the real estate scam, trying to be being smarter then the economic cycles).

    Always the same sources of impact popping up: Middle East War, and Real Estate Loan Scams.
  • iamnothere harry 2010/11/11 23:52:26
    because people here own the properties.. they are deflating which started when the bubble burst.. It is not owned overseas.. you might have noticed you own your home not the chinese

    Next word for your vocabulary.. (sarcasm intended) Foreclosure

    We do have almost a hundred billion in over seas trade each and every month.. so you have to understand that with those numbers.. and you inflate the money supply.. it kills the value of the $.. Have you not noticed that the price of a barrel of oil has risen 16.00 in less than 6 weeks? it is not because of demand.. just how much the fed is killing the dollar
  • harry iamnothere 2010/11/12 13:37:04
    Nothing new.
    A. Avoid a trade deficit.
    B. Be aware that commodity prices will rise as they did since ever
    C. Rise spending If salary to improve spending capacity. (It did not proportional since the 70th)
    D Prevent slows down in consumption (not by giving loans or CC Loans - That will be refinanced to home loans when the depth gets into danger territory.
    E. Don't oversupply for imaginary value - (like in the real estate crashed).
    F. If the availability of cash for consumption is limited then there is no growth.
    G. If the country does not produce then there will be no grow. Not Making Money but more earning money! The service industry is pure incest.
    H. We must get independent from OIL. Energy consumption should be 70% alternative Energy and rest Oil within the next 3 years - it's something America can do if they put the human talent to work. And if that would be the reason to print money so let it be - it pays.
  • Matt 2010/11/11 19:12:21
    China, India, Russia, Japan, and a lot of other countries are all heavily invested in imaginary American dollars. If any one of them tries to cash them in, our whole monetary system will collapse. They are playing chicken with each other to see who "flinches" first. Greenspan and Bernanke, like our politicians are tools of international bankers. They tell them when and what to say and profit immensely from the fear that he generates by trading in foreign currencies. american economy funnytools international bankers profit immensely fear generates trading foreign currencies
  • VoteOut 2010/11/11 17:59:39
    why is it so complicated If the FED really wanted more liquidty and spending in the market why dont they just stop paying favorable interests on the massive amounts of excess capitol the member banks are holding/keeping in reserves. Maybe even charge them intersts or fees for leaving this excess capital(stolen money, the very same money provide them by the taxpayer for free now we are paying them interests not to spend it all adding the national debt)

    So its a no brainer decrease the national debt and increase liquidity and spending "at the same time"

    Am I missing something hear?
  • iamnothere VoteOut 2010/11/11 18:00:51
    I dont think you have missed anything.. The leadership at the Fed and Treasury are thieves
  • Striker 2010/11/11 17:48:26 (edited)
    Perhaps I am naive on this one, but I don't subscribe to the concept that the destruction of the dollars is intentional, but it's certainly stupidity in action!

    That destruction is caused by trying to spin the world with fiat money. Certainly the Fed and Congress are in cahoots on that one. They know what could be done about that, but they will play the con-game until the end. They're afraid to fix it.
  • iamnothere Striker 2010/11/11 17:54:36
    it is intentional..

    Look the business cycle was starting to stablize there have been some signs of improvement.. granted tiny..

    But when you toss money at banks.. who have no impetus to lend.. it is just bad...

    It is voodoo economics.. Making the dollar more worthless so that you dont have to pay foreigners back .. they are just going to loose 20 to 30% of their investment..
    In the meantime.. because the value drops.. you can expect the cost of food and fuel to go up..

    The cost of living adjusters never include these two items.. but yet.. this is where massive inflation is.. Look OIL HAS GONE UP $20 a barrel in just over 6 weeks..

    Food is going up like crazy.. you know a can of spam.. YEAH your favorite mulled mystery meat is now over $4.50 a can a dozen eggs .. now almost $4 ..
    Beef has gone up nearly 40% and the list goes on and on and on..

    Monetizing the debt is just wrong.. Stop the spending.. that is really what needs to be done.
  • Striker iamnothere 2010/11/12 02:32:27
    Keynsian economics is pure voodoo, yet indeed.
  • jubil8 ... Striker 2010/11/12 02:11:28
    jubil8 BN-0 PON
    I think you actually prove that the destruction of the dollar IS intentional.

    1. "...trying to spin the world with fiat money." That's intentional.
    2. "They're afraid to fix it." So they do something they KNOW won't fix it -- that's intentional too.
  • Striker jubil8 ... 2010/11/12 02:31:05
    wow, hard to argue with that!

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