11.09.09 Our Strong Dollar Policy?

ECONOMY

WE HAVE A STRONG DOLLAR POLICY? Who knew? According to a spokeswoman for U.S. Treasury Secretary Henry Paulson, he remains "strongly committed to a strong dollar." I suppose we should be thankful for their strong dollar policy. Who knows what a weak dollar policy would look like, when the strong dollar policy finds the dollar regularly making record new lows.
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CHINA SIGNALS DOLLAR SWAP; DOW PLUNGES. (Washington Times). People in high places in other parts of the globe do not seem to agree with Mr. Paulson's spokeswoman:
..."The world's currency structure has changed....(The dollar) is losing its status as the world currency," said Xu Jian, a Chinese central bank vice director.
..."The dollar cannot remain 'someone else's problem. If we are not careful, monetary disarray could morph into economic war. We would all be its victims," France's President Sarkozy warned in his address before the U.S. CONgress.
...Funny, I watched CNBC for a quite a while the day of the Dow's 360 point plunge and don't recall the Chinese comments being a reason for the drop. Thursday was even funnier. When the markets were coming back off the lows that afternoon, chief cheerleader Maria Bartiromo called it turnaround Thursday and was interviewing more brokerages mouthpieces about what we should be buying now. It's always what we should be buying now, whether we should be or not.
...Why does all this matter to people who don't play the market? Because it is getting nasty out there. The powers that be (PTB) have always been able to come through and hold things together. They have a lot of weapons at their disposal. But I think that there may be a day coming when they may not be able to do that. And who do you suppose will be hurt the most and be left holding the bag. As a hint, remember that the PTB set up a $100 billion bailout fund for lenders recently. Headlines announcing similar help for strapped homeowners are nowhere to be found so far.
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Fed Chairman Says Economy Likely to Slow, (NY Times). He testified before CONgress that the economy will get worse before it gets better. What he didn't say was that the Fed's easy money policy has been a direct cause of all our current problems. For example, it was only a few years ago that Mr. Greenspan, Mr. Bernanke's predecessor as Fed Chairman, was luring people into the adjustable rate mortgages that are now blowing up in their faces, and in many cases, forcing them out of their homes. Mr. Greenspan basically said folks opting for those thirty year mortgages were losing thousands of dollars in the process. Until now, that is.
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MEMORIES: Greenspan Says ARMS Might Be Better Deal, (USA Today 2/24/2004). According to the article, "Federal Reserve Chairman Alan Greenspan said Monday that Americans' preference for long-term, fixed-rate mortgages means many are paying more than necessary for their homes and suggested consumers would benefit if lenders offered more alternatives."
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