Posted on 04/28/2011 5:51:06 PM PDT by BenLurkin
The dollar hit its lowest level since July 2008 Thursday, putting more pressure on savers, people living on a fixed-income and all consumers facing soaring commodity prices, most notably in energy.
Somewhere, Ben Bernanke is probably smiling.
Yes, Bernanke...talked tough about the dollar this week but "currency depreciation is always a central bankers dirty little secret," says Vincent Reinhart, a former director of the Fed's Division of Monetary Affairs. "They don't mind some depreciation at time…The trick is to generate some depreciation but not a lot."
It depends on your definition of "a lot"…
Since Bernanke took office on Feb 1, 2006, the dollar's purchasing power has fallen 11%, and its down 21% in the past decade and 82% since the U.S. got off the gold standard in 1971, according to Miller Tabak.
Apparently, that doesn't count as "a lot" or "too much" depreciation for Bernanke's tastes.
"A design principle of Federal Reserve policy is to get inflation up — to create more dollars so inflation doesn't fall anymore; that's associated with currency depreciation," Reinhart explains. "[But] they've got to say 'a strong dollar is in the national interest' because they don't want to be seen as promoting a weak dollar."
Because of the Fed's dual mandate — full employment and price stability — "they're not really going to care about the dollar until they see inflation rise too much or inflation expectations begin to creep up -- and thus far they haven't seen that," he says.
Similar to Christina Romer's recent comments here about the benefits of a weak dollar, Reinhart's comments are notable because they give some insight into the mindset of the central bank.
The market is clearly on to this game as currency traders are focused on what policymakers are doing vs. what they're saying.
(Excerpt) Read more at finance.yahoo.com ...
Currency depreciation is a way to tax the people who aren’t Eric Holder’s people that they can’t do anything about.
This a good post for all the Herman Cain-iacs out there to read and ponder. The Fed Reserve is destroying America. That’s what the traitors on Jeckyll Island designed it to do. People don’t become honchos at the Fed because they are wonderful American Patriots.
Huh? Are you from DU?
“Herman Cain is a fraud.”
What do you mean, a fraud? In what way?
Herman Cain said that the Fed has already been audited and there is no need to pursue it any further.
I’ve never heard him say that. Did you personally hear him say it - or do you have a link if from an article? Thanks.
Never mind. I found some info.
Can you post what you found?
If I’m understanding, HC believes there should be congressional oversight but not a presidential audit of the fed.
I haven’t read or listened to his original statement, but here’s the link for his clarification of what he said regarding the fed not being audited (this was in January 2011) — and apparently a few days later he made this clarification.
http://www.youtube.com/watch?v=u2Mqie_h9uU
After reading creature from jekyll island - I really wised up to the treason and threat these bankers pose.
Currency depreciation is PC speak for devaluation
Thanks!
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