Posts Tagged ‘devalue US dollar’

He said this as well before the last round of printing to buy debt, that time it was hidden, this time?  Who knows…

I am always amazed at how someone can say one thing and do the complete opposite.  It is very common place these days.  Deception seems to be the norm…


Geithner Vows That US Won’t Devalue Dollar

Treasury Secretary Timothy Geithner vowed on Monday that the United States would not devalue the dollar for export advantage, saying no country could weaken its currency to gain economic health.

“It is not going to happen in this country,” Geithner told Silicon Valley business leaders of devaluing the dollar.

Geithner broke his silence on the dollar’s protracted slide ahead of this weekend’s meeting of finance leaders from the Group of 20 wealthy and emerging nations in South Korea, where rising tensions over Chinese and U.S. currency valuations are expected to take center stage.

“It is very important for people to understand that the United States of America and no country around the world can devalue its way to prosperity, to (be) competitive,” Geithner added. “It is not a viable, feasible strategy and we will not engage in it.”


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I can’t believe they are talking about this, there is nothing worst for our dollar and our purchasing power.  What little savings Americans have is being eroded (stolen) while it sits in banks.  Check out the graph below, from a WSJ article, it shows the cliff we are facing.

If this quadruple whammy hits:

tax increases (from Obama and bush tax cuts expiring)(end of year),

Obama care takes effect (end of year),

our trade war with China is escalated (underway), and

the Fed’s Inflation Fix (between now and end of year)

we will go over the edge of the cliff…(just like in 1937…)


Fed Officials Mull Inflation as a Fix

The Federal Reserve spent the past three decades getting inflation low and keeping it there. But as the U.S. economy struggles and flirts with the prospect of deflation, some central bank officials are publicly broaching a controversial idea: lifting inflation above the Fed’s informal target.

The rationale is that getting inflation up even temporarily would push “real” interest rates—nominal rates minus inflation—down, encouraging consumers and businesses to save less and to spend or invest more.

Both inside and outside the Fed, though, such an approach is controversial. It could undermine the anti-inflation credibility the Fed won three decades ago by raising interest rates to double-digits to beat back late-1970s price surges. “It’s a big mistake,” said Allan Meltzer of Carnegie Mellon University, a central bank historian. “Higher inflation is not going to solve our problem. Any gain from that experience would be temporary,” adding that the economy would suffer later.


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