Some Things Really Piss Me Off --- Chief Among Them Are Blatant Lies By Government Officials:
I don't know if Mr. Geithner thinks we are all stupid, or if he actually believes anything he is saying. Out of one side of his mouth he says, "We will not devalue the dollar!" Out of the other side of his mouth he says, "that we really want the dollar devalued versus the Chinese yuan!" Well, which is it?
Oh, and by the way, Mr. Geithner did you happen to catch any of Mr. Bernanke's speech last Friday. In nearly 4,000 words he went on and on about how the Fed was ready to do whatever is necessary to stimulate the economy, printing money to buy treasuries (i.e. Quantitative Easing), was chief among the proposed solutions. But not once in 4,000 words did he mention the US Dollar, it is not part of Fed policy.
Lets not take Mr. Geithner's word, lets just look at the facts. The first chart below shows the value of the US dollar versus a basket of other currencies, as you can see the trend is clearly down. And remember this measurement is against other currencies that are actively trying to devalue too. So far we're winning that race!
The second and third chart show the value of the dollar versus gold. I don't need to belabor the point, but clearly the US has not, and does not, have a strong dollar policy!
U.S. Treasury Secretary Timothy Geithner said on Monday that the dollar will remain the world's reserve currency during "our lifetime" and the United States will not devalue it.
"It is not going to happen in this country. 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 told Silicon Valley business leaders. "It is not a viable, feasible strategy and we will not engage in it."
Charts Showing US Dollar vs Gold:
Be careful out there, and keep the light's on,
Chris Wiles, CFA
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This article contains the current opinions of the author but not necessarily those of the Rockhaven Capital Management. The author’s opinions are subject to change without notice. This article is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.
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