The administration should stop talking down the dollar. We've had some good economic news and Greenspan has been gradually raising rates. Of course, the variable is whether the administration can cut spending. Nevermind, what was I thinking?
Hey Moonman, I agree with your inference that the freefall in the dollar should stop. But please tell me what tools exist at the Presidents pleasure to stop this. You approach the answer when you observe that Greenspan is raising interest rates. Yes, but a 25 basis point increments. Excuse my French, but this is like pissin the ocean. If he was committed to stop the freefall he would reach to 400 or more basis points. That of course would stop the freefall, but unfortunantly the economy also. These problems were created with Greeenspans easy money policies, and now we are in this conundrum. Part of the answer is as you say, cut spending. Tell me the political leadership that exists as of now who will step forward and make such a proposal, either right or left. No one exists to do it. So that is not going to happen. They will not raise taxes overtly, but they will raise taxes with the historical sabre that is always pulled out..inflation. This is the hidden tax on every dollar that exists. And it is the only tool the policy maker have the balls to use, because no one will point the finger of delegated blame because the whole damn government has foistered this over on the American public. All of the ad hominem attacks on this thread will not avert the tidal wave of debt that is roaring like a tsumami at a slumbering population. As it exists now, it is neither right nor left as an ideology, any more than a smallpox plague can be blamed on the dems or republicans. It is a whole "nuther" story as to how we arrived at where we are, but here we sit. Look at the USDX just the past 3-4 weeks. There is a moderate support line at 81.5. Once this is breached for several days, it is nonstop to 71. That ought to make the naysayers feel warm and fuzzy about their childrens future. Just watch it blow past the little resistance of 71 and it will not, and cannot be stopped until 51. It will take on a life and velocity of its own. Neither President Bush, nor Greenspan will have the tools nor the inclination to stop it. Who then? The Janenese, the Chinese? Those who think debt is good and a dollar in extremis is a good thing, better do some more reading on the subject. Your future, and that of your family is being mortgaged and that debt will be paid. ALL DEBT IS PAID. No exceptions until you move to totalitarianism. Then it is paid in mysery, blood, violence, and massive shifts of wealth away from the middleclass to those who saw it coming. Yes, yes I know.. the sky is falling. Keep your mantra and keep repeating it. It should make you feel good about yourself when this bloodletting is extinguished.