Fed Bank Of New York Admission To Devaluing The Dollar By Design

RATSOADM · #1 (**permalink**) 02-29-2008, 12:21 AM

for fans of the federal reserve

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This article appeared in print 2006. It's not a conspiracy, just facts! Though there are many other sources depicting our economic demise such as the Club of Rome, etc. This article illustrates the arrogance of these traitors. This article is in pdf format, so you will have to scroll down to the 7th page from top.

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By: Michael
Woolfolk, Senior
Currency Strategist
Dollar implications of the US financial “dream team”

US Treasury Secretary Hank Paulson was sworn into office recently with strong bipartisan support. Hopes run high that he can revitalize
efforts on entitlement reform, deficit reduction and Chinese currency flexibility. Paulson and newly installed Fed chairman Ben Bernanke are arguably the best-qualified US financial duo of the post-war era. Together they represent a financial “dream team” for President Bush with pro-growth bias evident on both accounts. However, successful financial and monetary policy making could paradoxically support US growth while at the same time undermining the dollar.

The US Treasury’s so-called “strong dollar policy” faces its greatest test this year as Secretary Paulson defines his views on the role of the US dollar in correcting the global imbalances problem. His views regarding entitlement reform and deficit reduction are consistent with longer-term bipartisan goals, though short on affirmative steps to be taken. However, his views on currency policy remain largely obscure. While Paulson generally agrees with the benefits of a strong US dollar, he acknowledges the need to address the global imbalances problem before it threatens economic and financial market stability. Does this imply an end to the “strong dollar policy?” It certainly could.

Most economists agree that a weaker dollar is a necessary but not sufficient condition to resolve the growth in global current account
imbalances. The orthodox solution provided by the G7 is for the US to reduce spending and increase savings, for Germany and Japan to implement pro-growth reform, and for Emerging Asia to embrace currency flexibility. By most accounts, the US dollar is overvalued against many Asian currencies—most notably the Chinese yuan. The challenge for Paulson will be to leverage his considerable experience in China to restart talks on Chinese currency reform. China is currently experiencing real GDP growth of 10% annually and monetary supply growth approaching 20%. Were Chinese CPI maintained at 10% annually for three years, the yuan would only require a modest 5% annual nominal revaluation to return global imbalances to sustainable levels. This could begin at the inception of China’s anticipated move to a wider currency trading band later this year.

With US Fed preparing to pause later this year and the ECB and BOJ expected to continue removing monetary accommodation, interest rate differentials are expected to narrow, removing an important element of support for the US dollar. Ironically, the greater Bernanke’s inflation-fighting credibility with financial markets, the less he will need to hike interest rates, and the sooner interest rate differentials
will begin to narrow and undermine the dollar. Similarly, the greater Paulson’s China credibility, the more successful he will be at forging a bilateral agreement on currency flexibility, and the sooner the dollar will resume its structural decline.

So when you hear people say the elite are going to milk everything from you. Here's just one example:

Higher Credit Card Rates May Be Lurking in Your Mailbox

Higher Credit Card Rates May Be Lurking in Your Mailbox

You'd think that an economic environment chock-full of interest rate cuts from the Fed would lead credit card issuers to gradually decrease the rates they charge us on our plastic. But no -- many cards have actually been raising their rates recently. Bill Hardekopf of LowCards.com, for example, has noted rates moving in directions other than down at cards from American Express (NYSE: AXP), JPMorgan Chase (NYSE: JPM), and Bank of America (NYSE: BAC).

What's going on? Well, there's been a bit of a financial crisis at many banks (you may have heard about it). It's related to their having issued a few regrettable mortgages to risky borrowers. So, perhaps feeling pressured, they're seeking out additional income from the likes of you and me, via the debt that we carry.

Taken from http://down2.nmag.cn/finance/Global....ember.2006.pdf

rightwinger · 02-29-2008, 06:58 AM

again. You gotta post the site where you got it from.

- Post details: Fed Bank Of New York Admission To Devaluing The Dollar By Design

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The orthodox solution provided by the G7 is for the US to reduce spending and increase savings

Which hasn't really happened.

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By most accounts, the US dollar is overvalued against many Asian currencies

This mean anything to you?

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for fans of the federal reserve

The US Treasury doesn't get any of your blame?

Plus. It's not really the Fed. It's more the deficit, the constant spending, and the borrowing from China. That's not really on the Fed, imo. Bush shares most of theresponsibility for the weak dollar.

NPR: Is a Weak Dollar Really So Terrible?
The dollar | The panic about the dollar | Economist.com

The idea that the existence of the Fed is to blame, is silly. Or some kind of "elite" strategy or something.

**Arcángel** · 02-29-2008, 07:04 AM

Quote:

Plus. It's not really the Fed. It's more the deficit, the constant spending, and the borrowing from China. That's not really on the Fed, imo. Bush shares most of the responsibility for the weak dollar.

You know what scares me the most though? when someone tells Bush about gas prices, and how they have broken the $4/gallon mark. He says something to the effect of, I never knew about that. That's interesting.

My mind stopped and I could swear that I heard everyone in the US watching this press conference say in one collective voice, "we're fucked"

And than I see this and I go, yup, we're fucked.

JumpInTheFire · 02-29-2008, 09:44 AM

Quote:

Originally Posted by rightwinger

Plus. It's not really the Fed. It's more the deficit, the constant spending, and the borrowing from China. That's not really on the Fed, imo. Bush shares most of theresponsibility for the weak dollar.

Oh on the contrary. I'm sure I can speak for RATSOADM when I say that we also blame Bush and other entities for our current economic situation. Borrowing and being more and more dependent on China, as well as being in 130+ countries and running up the deficit surely doesn't help

rightwinger · 02-29-2008, 12:38 PM

Quote:

Originally Posted by JumpInTheFire

Oh on the contrary. I'm sure I can speak for RATSOADM when I say that we also blame Bush and other entities for our current economic situation. Borrowing and being more and more dependent on China, as well as being in 130+ countries and running up the deficit surely doesn't help

Right. but, when the "elites are purposely doing this to screw everyone over" card is pulled. I tune out.

When I learn more about economics (if I'm still around this forum) I can talk about the subject better. Right now, I really don't know enough.

Static · 02-29-2008, 01:13 PM

Quote:

Originally Posted by rightwinger

Right. but, when the "elites are purposely doing this to screw everyone over" card is pulled. I tune out.

See, that kinda proves your bias right there.

Why is that such a crazy idea? That's sorta what I don't understand, if you don't take it seriously from the start, and it does turn out to be true, you don't believe it... All I'm saying is shit like that could be true, it's for sure at least a possibility, and you should treat it like it could be.

RATSOADM · 02-29-2008, 01:45 PM

Quote:

Originally Posted by rightwinger

again. You gotta post the site where you got it from.

- Post details: Fed Bank Of New York Admission To Devaluing The Dollar By Design

Which hasn't really happened.

This mean anything to you?

The US Treasury doesn't get any of your blame?

Plus. It's not really the Fed. It's more the deficit, the constant spending, and the borrowing from China. That's not really on the Fed, imo. Bush shares most of theresponsibility for the weak dollar.

NPR: Is a Weak Dollar Really So Terrible?
The dollar | The panic about the dollar | Economist.com

The idea that the existence of the Fed is to blame, is silly. Or some kind of "elite" strategy or something.

Wow youre not even very GOOD at changing the topic and avoiding the issue... talk about who else is to blame.. well even you are to blame then right? so should we ignore the fed now?

Quote:

Oh on the contrary. I'm sure I can speak for RATSOADM when I say that we also blame Bush and other entities for our current economic situation. Borrowing and being more and more dependent on China, as well as being in 130+ countries and running up the deficit surely doesn't help

Looks like im gonna be carpooling more often

rightwinger · 02-29-2008, 02:40 PM

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See, that kinda proves your bias right there.

It's not a bias. It's an opinion.

Quote:

Why is that such a crazy idea?

Why is what such a crazy idea? A group of elite bankers ruling the world? It makes no sense to me whatsoever. That's why it seems crazy to me.

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All I'm saying is shit like that could be true, it's for sure at least a possibility, and you should treat it like it could be.

I would treat it like it could be, if I saw proof. Until then, I remain skeptical. The animosity comes from being lectured to.

Quote:

Wow youre not even very GOOD at changing the topic and avoiding the issue... talk about who else is to blame.. well even you are to blame then right? so should we ignore the fed now?

Should we ignore the fed now? What? I don't know. If you are trying to say that a weak dollar is reason to abolish the Fed...I would say no.

If you're trying to say that this is proof of some kind of conspiracy, I would also say no.

If you're trying to offer this of proof of the "elites" who run everything I would say no.

And again. You should post the links from which you got the info.

how did I change the subject? This seems to be about the weak dollar, no?

RATSOADM · 02-29-2008, 03:15 PM

Quote:

Originally Posted by rightwinger

Should we ignore the fed now? What? I don't know. If you are trying to say that a weak dollar is reason to abolish the Fed...I would say no.

If you're trying to say that this is proof of some kind of conspiracy, I would also say no.

If you're trying to offer this of proof of the "elites" who run everything I would say no.

And again. You should post the links from which you got the info.

how did I change the subject? This seems to be about the weak dollar, no?

hahahah just like a 12 year old kid "how did I change the subject? I will act ignorant now... play the victim next..."

rightwinger · 02-29-2008, 08:32 PM

Alright RATSOADM. I'm genuinely not sure how I went off topic I don't believe I did, but let's get on topic.

What do you feel this article suggests, and why? What conclusions do you draw based on the info in this article?

Also. Are you ever going to start posting the links to where you get this stuff?