I actually emailed the Federal Reserve today before I saw this post. Everyone should let them know what we think. Killing the dollar might save the banks but it's going to kill us - the consumer.
Credit is not needed for growth BUT investments are needed. If you look at Norway for instance, no debt and have a moderate growth rate. I believe they are the second richest country in the world based off per cap income. The world is changing however we aren't adapting very well. There are three areas needed for economic growth.. First and for most we need a strong infrastructure. Second, we need investment(which doesn't have to be debt), capital to required to back the risk invovled (Cash is KING). Lastly we need talent, as we aren't competting with each other but now global nations.
You are mistaken. The FED does not have a mandate to determine the value of the dollar. ( If you don't believe me see the Q&A session between Bernanke and Ron Paul the other day during Congressional testimony ). Dollar policy is up to the Treasury Secretary. Your letter should go to Paulson, not Bernanke.
But Tim you're not seeing the whole picture. Yes, it's true that Fed policy has contributed to the weak dollar. But it is not the whole reason. How about the large current account deficit? How about America's lack of savings? How about a manufacturing base that was not competetive with Asian countries? How about America's reliance on imported oil? Think about it. Think about the years when the U.S. had strong dollar. What did it create? Large trade imbalances. It made it cheaper for the U.S. to purchase goods from abroad than to make it in the USA. The whole dollar depreciation (NOT DEVALUATION as these two things are different) is a natural process. It is necessary for trade flows to come back into balance.
Norway may not be a very good example for the simply reason that they have a "mixed" economy with a high degree of socialism. I'm not so sure that all of the free-market capitalists here on ET would agree with your example. That having been said, they do however possess the second highest GDP per-capita in the world. The bottomline is that American's have a horrible savings rate. Always have, and most likely always will. True, you can get capital investment from countries with high savings rates, but again, that is fantasy here in the United States of Consumption . . . and this is why the FED winds-up having to get involved one way or another, right or wrong ( ie. Alan Greenspan ). I hear what you are saying though.
Credit != government debt. Norway may have little debt but they do have a working private banking system where banks borrow funds among each other and provide loans to corporations and individuals right? When banks become unwilling to extend credit to the economy regardless of the creditworthiness of the counter party then the economy is in deep trouble. Credit contracts in that case.
OIL KEEPS GOING UP YAHOOOOO... OIL IS ON FIRE! NATURAL GAS, ON FIRE! The rest of the US Is falling to shit. It's to late. 200 billion can't save this economy, do you think hiking rates to 12% will? Every man for himself, make your money and be happy. Otherwise, get use to living in "PROJECTS" that were once called SUB-BURBS.
OH YEA, what makes you guys think that all that Short Term 28 Day exchange (200 billion Socialist bail out) is going to be a positive, after the 28 days. Hummm seems to me someone will be left holding the worthlessssssss bags of shit after 28 days. HUMMM
The consumer is 70% of GDP growth. Now can you stand their and tell me credit creation is more important than job growth. Here is how it works, no job no credit, make since? Man you guys must work for Capital One.
So maybe Norway isn't the best example, I agree with you there. As we live in America, for sometime now we have relied on credit for too long. And Americans don't save anything, I remembered when I got my first job my dad MADE me save half of my take home..LOL. As a kid it didn't really matter, however that was the best lesson..to this day I still put away half of everything I make. I have been trading for almost 10 years now. When I first started out, it was tough but I got through it. We need to educate the future of our country what savings means and that we use credit for shelter and transportation, thats it. I have tossed back a few since the close so bare with my grammar. LOL