Bush's Disastrous Dollar Policy; Dollar Falls After Bernanke Signals Downside Risks to Growth

[ProSense]

Bush's Disastrous Dollar Policy

By Dan Froomkin
Special to washingtonpost.com
Thursday, November 8, 2007; 1:32 PM

President Bush doesn't talk about the dollar much, but when he does, he's got exactly one thing to say about it: "We have a strong dollar policy."

It's becoming increasingly clear, however, that Bush's "strong dollar policy" is driving the greenback into the ground.

The dollar is hitting record lows this week amidst fears that the mortgage-market meltdown will spread to other parts of the economy and as the Chinese make noise about moving more of their investments into euros. But it is the underlying dynamics of the American economy -- continued massive trade deficits and a whopping national debt -- that have put the dollar in such a precarious position.

A true strong dollar policy, aimed at increasing the confidence of international investors, would require Bush to do a bunch of things he doesn't want to do. For instance, he would have to stop borrowing so much money to fund his tax cuts and his wars. He would need to encourage the Federal Reserve to raise interest rates, rather than depend on it to keep propping up the domestic economy by decreasing them. That sort of thing.

Instead, Bush just offers the strong-dollar line, without specifics, and moves on.

Consider how eager he was to drop the subject last month during a Wall Street Journal interview:

WSJ: "(T)here has been a lot of concern, obviously, about the value of the dollar around the world, and some calls for the U.S. to put more action behind its vow that we support a strong dollar. How do you respond to them, and do you think Treasury needs to intervene at all at this point?"

Bush: "Secretary Paulson, of course, is our main spokesman on this issue, and he reflects the view of this administration that the strong dollar policy is the correct policy. And we also believe that the best way for a currency to become valued is through the market."

WSJ: "That's it?"

Bush: "Yes."

more

Dollar Falls After Bernanke Signals Downside Risks to Growth

By Min Zeng

Nov. 8 (Bloomberg) -- The dollar fell to within a cent of its record low against the euro after Federal Reserve Chairman Ben S. Bernanke said the U.S. economy is likely to ``slow noticeably,'' raising speculation of a third interest-rate cut this year.

The U.S. currency touched the weakest since 1981 versus the pound and the cheapest since 1995 against the Swiss franc as the prospects of lower rates dimmed the allure of U.S. assets. The dollar's decline started after the European Central Bank and the Bank of England kept their borrowing costs unchanged today.

``The dollar will continue to lose its appeal,'' said Robert Fullem, vice president of U.S. corporate currency sales at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``Bernanke's crystal ball is foggy. The growth picture is worrisome and the Fed needs to cut rates further.''

The dollar fell to $1.4679 per euro, from $1.4637 yesterday, at 4 p.m. in New York. The dollar touched $1.4731 yesterday, the weakest since the European currency started trading in January 1999. The U.S. currency gained to 112.71 yen, from 112.63.

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Bankruptcy Law Backfires on Banks as Foreclosures Offset Gains

[ORDagnabbit]

1. I hate bush...but its not just his fault....go back to 1913 and thats where the problem began

www.moneyasdebt.net

[ProSense]

2. I hate Bush and he's done the most serious damage, starting with the debt:

Experts: Fiscal crisis threatens U.S. future

[wuushew]

6. Did you object to the Bank of the United States in the 19th century as well?

Nothing but rampant boom and bust cycles and a mad frenzy for so called precious metals.

Controlling the money supply via the amount of lending in an economy is a perfectly legitimate tool of the government.

Please outline your view of the United States without a federal reserve system. Would you control the money supply solely by the rate at which the printing presses run?

[ORDagnabbit]

7. how bout you watch the vid then get back to me that way we'll be on the same field of understanding.

pm when you're done and we can start a thread together.

[tularetom]

3. Easier to pay off bush's ginormous debt with dollars that are worth less

than the dollars that were borrowed.

What we have is a WEAK dollar policy. But terminology like that would never fly with the "base". We don't do anything "weak". We're amrukins goddamnit.

[JDPriestly]

4. Bush's Modus Operandi -- say one thing and do the exact opposite.

Bush says he has a strong dollar policy. In fact, he has a weak dollar policy.

[lovuian]

5. JD this is exactly what I have noticed he does exactly the

opposite of what he says... there has to be some reason why he does this???

I know he is a liar but he just keeps doing it over and over again its like a ritual with him

[Toots]

8. We sure haven't heard the term an "over heated" economy which was used so many times

during the Clinton Administration when the Feds raised interest rates to slow it down. Can't figure out why that is...:think: