Geithner Misspeaks

[haha]

https://news.fidelity.com/news/news...MBINED_TRE69H4VO_1&cat=Top.Investing.RT&IMG=Y

Geithner vows U.S. will not devalue dollar

REUTERS — 48 MINUTES AGO

I am trying to understand this. What does Geithner think is happening at this very moment? USD down, other currencies and gold and silver and oil up. Is this not what devaluation is?

I suppose he has unlimited trust in our stupidity, and maybe he is right to feel this way.

Ha

 

[FinanceDude]

https://news.fidelity.com/news/news...MBINED_TRE69H4VO_1&cat=Top.Investing.RT&IMG=Y

Geithner vows U.S. will not devalue dollar

REUTERS — 48 MINUTES AGO

I am trying to understand this. What does Geithner think is happening at this very moment? USD down, other currencies and gold and silver and oil up. Is this not what devaluation is?

I suppose he has unlimited trust in our stupidity, and maybe he is right to feel this way.

Ha

Our expectations are much too high for a guy that has trouble paying taxes..........

 

[FUEGO]

Talking the dollar up is cheaper and easier than making any substantive policy changes that would lead to a stronger dollar.

 

[Gumby]

Treasury Secretaries are obligated to say they want a strong dollar, regardless of how they really feel. It is part of the job description.

Paulson 2007:

Paulson says strongly committed to strong dollar | Reuters

O'Neill 2001:

Dollar to Remain Strong, Treasury Secretary Says / O'Neill assures G-7 that U.S. economy will thrive in 2nd half of year - SFGate

Rubin 1995:

Dollar Dips As the Peso Falls Again - NYTimes.com

 

[traineeinvestor]

If they want a strong dollar then why do they have a problem with China's (allegedly) undervalued currency?

Sarcasm aside, there are all sorts of reasons why Geithner (and others) need to talk up the dollar:

1. need to sell lots and lots and lots of bonds at very low interest rates - who is going to accept very low yields on an investment and, at the same time, expect the value of that investment to depreciate because of a weak currency?

2. capital flows - if people expect a currency to weaken, a lot of people will act on that belief - by delaying or cancelling inward remittances or sending money offshore - there is no shortage of examples to look at

3. as FUEGO said, talk is cheap - and it has worked so well for Japan

 

[LARS]

I learned long ago, as I suspect all on this board have, to judge a person based upon his actions, NOT his words. Especially true with politicians.

 

[traineeinvestor]

Especially true with politicians.

You mean we elected leaders who are "economical with the truth" ?

 

[EO 11110]

https://news.fidelity.com/news/news...MBINED_TRE69H4VO_1&cat=Top.Investing.RT&IMG=Y

Geithner vows U.S. will not devalue dollar

REUTERS — 48 MINUTES AGO

I am trying to understand this. What does Geithner think is happening at this very moment? USD down, other currencies and gold and silver and oil up. Is this not what devaluation is?

I suppose he has unlimited trust in our stupidity, and maybe he is right to feel this way.

Ha

He is right. But he's getting wronger every day. More people are understanding how the monetary system works. The internet is amazing.

 

[keegs]

hey...if it helps some single mother in Ohio keep food on the table... I hope he keeps talking..

 

[chinaco]

He is signaling domestically and internationally his postion.... no currency war!


http://finance.fortune.cnn.com/2010/10/18/what-exactly-is-a-currency-war/

 

[Gone4Good]

I believe he's referring to technical currency intervention, which we don't engage in (e.g. sell dollars buy Euros for the purpose of affecting exchange rates).

On the bigger picture, most economists think the dollar should, and will eventually, decline to alleviate structural trade imbalances. A big part of the reason it hasn't declined thus far is because the Chinese continue to buy massive amounts of dollars to weaken their own currency, and other Asian nations do similar things to remain competitive with China.

Alternatively, if we want to alleviate the structural trade imbalances while maintaining a "strong dollar" then we'll have to find a way to reduce wages in the U.S. to the point where we're competitive with most of Asia. I'm not aware of anyone who thinks that's a good idea (or even possible, absent policies that force protracted large scale unemployment), although there are plenty of people who argue for a "strong dollar" without discussing all of the implications. Maybe we could start by talking about what "strong dollar" policies we should employ in the face of 10% unemployment and declining inflation . . . raise interest rates, buy dollars and sell Euros (with what, btw)?

 

[fritz]

He is signaling domestically and internationally his postion.... no currency war!


What exactly is a currency war, anyway? - Fortune Finance

+1 (fairly straight forward - "no currency war")

 

[Gone4Good]

If they want a strong dollar then why do they have a problem with China's (allegedly) undervalued currency?

Why allegedly? Isn't the persistent increase if FX reserves in order to maintain a fixed exchange rate objective evidence of China's efforts to suppress the value of its currency below a market clearing price?

 

[MasterBlaster]

The Article MisQuotes geitner

To be fair to Geitner, he didn't say the US will not devalue the dollar.

He said that a strategy of devaluing our currency is not a strategy for prosperity and that we intend to pursue a strong currency policy in our own interests.

He's right on that, in my opinion.

 

[ziggy29]

He's just trying to mollify China, IMO.

 

[Nords]

Treasury Secretaries are obligated to say they want a strong dollar, regardless of how they really feel. It is part of the job description.

I think it's been going on since Bretton Woods was a sapling...