Soon, your money won't be worth shit, Amurkn!
You'll need a day's wages for a quart of wheat!!
And your shit government is HAPPY ABOUT THAT!
"U.S. Affects a Strong Silence on Its Weak Currency" by EDMUND L. ANDREWS
The dollar is near record lows against the euro and has weakened considerably against several other major currencies, but officials in Washington are reacting with almost contented silence.
Less than two weeks before finance ministers from the Group of 7 leading industrial nations are to meet to discuss economic policy, European officials are grumbling about the weakened dollar because it makes American exports cheaper in world markets.
Jean-Claude Trichet, president of the European Central Bank, reiterated on Monday that he was paying “great attention” — a week ago he spoke of his “extreme attention” — to American statements in support of a “strong dollar.”
But while the mantra of the Bush administration remains that a “strong dollar is in our nation’s interest,” that formulation has not changed in the last five years as the dollar gradually lost about a third of its value against the euro.
On Tuesday, the euro settled in New York at a rate of $1.4098 — slightly below its record high a few days ago. In January 2002, the euro was worth around 86 cents.
Indeed, when the dollar’s slide accelerated after the Federal Reserve lowered interest rates on Sept. 18, American officials barely even repeated the strong-dollar formulation.
“They don’t really care what the dollar does, at least within a fairly wide range,” said Adam S. Posen, deputy director of the Peterson Institute for International Economics in Washington. “What the U.S. government cares about above all is that the changes are orderly.”
[To GLOBALIZATION and a PRISON PLANET!!]
Since the dollar began declining again three weeks ago, the Treasury secretary, Henry M. Paulson Jr., has mentioned a strong dollar only once — on Sept. 21, in a trip to Canada, just as the American currency was dropping to parity against the Canadian dollar for the first time in three decades. Yesterday, the Canadian dollar settled at $1.0169.
“I feel very strongly that a strong dollar is in our nation’s interest,” Mr. Paulson said then, “and we believe that currency values should be set in a competitive marketplace based on underlying economic fundamentals.” In practice, analysts said, the administration’s position has effectively been that a strong dollar is whatever value the foreign exchange markets settle on.
By contrast, Mr. Paulson has repeatedly expressed satisfaction that American exports have climbed by about 15 percent in the last year, a trend that has been helped by the weaker dollar.
Analysts see little mystery in the American position: at the moment, a weaker dollar offers more benefits than a stronger one. The cheaper dollar offers a lift to American exporters by making their products competitive in many parts of the world. And while a weak dollar usually makes imports expensive, import prices have so far climbed less than other currencies’ values because foreign producers have kept prices low to preserve market share in the United States.
[Never mind that they may be poisonous products; they are CHEAP!]
“Implicitly, Paulson and the Federal Reserve are happy with a gradual fall in the value of the dollar,” said Nouriel Roubini, an economist at New York University. “They’ll never say they favor a weak dollar, but the benefits to the U.S. in terms of competitiveness are significant.”
Though Mr. Paulson has primary responsibility for American exchange rate policy, Federal Reserve officials have also made it clear that they are not worried about imminent inflationary dangers from a weaker dollar.
The Fed chairman, Ben S. Bernanke, recently told a Congressional hearing that the dollar’s value remains strong in other ways. “The value of the currency can also be expressed in terms of what it can buy in domestic goods — the domestic inflation rate,” Mr. Bernanke said in response to questions about the dollar from Representative Ron Paul, Republican of Texas and a long-shot candidate for the Republican presidential nomination. Noting that inflation remains low, Mr. Bernanke suggested that the dollar’s weakness was not a source of concern to the Fed.
Democratic lawmakers, who have been quick to attack the Bush administration about most other economic policies, have said almost nothing about the currency’s decline.
[Yeah, Ron Paul is the only one talking about this, which is why America wants him!]
To at least some European officials, worried that the soaring value of the euro will hurt European exports, the American silence has been thunderous.
“I would like very much to hear U.S. Treasury Secretary Henry Paulson repeat loud and clear that a strong dollar is good for the American economy,” said Christine Lagarde, France’s finance minister, in an interview last week with a business newspaper, Les Echos.
Mr. Paulson has yet to respond. So European officials have resorted to reminding him about the one statement he did make. “We agree with Mr. Paulson,” said Miguel Ángel Fernández Ordóñez, governor of the Bank of Spain and a board member of the European Central Bank.
Yet even as European and American officials warily circle each other on the currency, a bigger issue for both the United States and Europe is China, which continues to tether the yuan closely to the dollar as its trade surplus swells further.
To keep the yuan from rising beyond a relatively narrow range, China’s central bank has stepped up its already huge purchases of dollar-denominated securities. According to recent data, China’s foreign reserves have been climbing at a pace of $40 billion a month — twice as fast as last year.
That has kept the dollar artificially elevated against the yuan, but made Chinese products even cheaper in Europe than they would be otherwise.
In recent days, European officials like Mr. Trichet have begun to focus more on demands that China allow its currency to float more freely. That would be in line with longstanding efforts by the United States. But thus far, those efforts have had very limited effect on Chinese policy."
