Geithner is paid to lie, it is his job. Fed and Treasury have been reduced to jawboning as "the tool box is empty, except for QE".
I believe that QE has been removed as an option. The reason for this is I read somewhere that China and Japan had both recently stated to the US @ meetings that it had to stop OR they would "take appropriate action" such as selling their immense holdings in US debt. Both also accused the US of hypocrisy as it relates to currency devaluation. If they start selling, then others will follow suit, the USD will become worthless...which actually means nothing...but what Bernanke fears is IF China and Japan do this, his real employers (not US govt or citizens) will lose a considerable amount of money and the power that goes with it. IMO the only tools they have left is lies, ratchet jawing, deceit, manipulation of data supplied by the US govt and Bernanke and the short term memory of most of the population! Would you like to be in Bernanke's shoes if China and Japan sell their immense US debt holdings? I would not!
Let's cut down to the core issue. The value of the $USD. How they do doesn't matter as much as what the value of it is. I recall vividly the US gov. ( I believe it was Obama ) recently saying the US is going going to boost exports. How do you do that? By devaluing the currency. Look back on recent history. When the greenback was weak our exports went up.
As long as the Chinese min. wage is 1/10th of US's, no matter how low the USD gets, we still can not increase exports to make it more than our imports. In order for this to happen, either chinese wages should rise to American level or American wages should be lowered to Chinese level.. Maybe it will meet somewhere in between. But if that happens, why would anyone wanna migrate to USA? This is confusing.
Right and that's a fair point. To piggy back on that why does China have protection policies and we don't? http://blogs.telegraph.co.uk/news/malcolmmoore/9067026/China_leads_the_way_in_protectionism/
And that's why bubble ben bernanke will keep rates down at 0% for the next 2 years or more. Who knows how many years before rates get back to 2% or even 4%, going to be at least a decade or more. The economy is so used to 0% rates that anything higher will scare the markets. Believe me when I say geithner has no clue what he's talking about, he will devalue the dollar and not give one fuck about it. The weak dollar is going to set off many problems moving forward.
Rates go up , they (and we) are fubared. The sad part is all the huge deficit spending occuring is discouraging capital formation. Looks like no way out except to keep lying until the whole thing comes crumbling down.