Why current administration doesn't intervene US$ decline?

alientrader · Nov 15, 2007

Quote from a529612:

WASHINGTON -- The U.S. dollar has fallen 9.5% against major currencies since Henry Paulson became U.S. Treasury secretary 16 months ago. His response has been to repeat the mantra that a "strong dollar is in our nation's interest."

What would it take to make Mr. Paulson and Federal Reserve Chairman Ben Bernanke, who has seen the dollar fall 11% since he took office in February 2006, respond to the dollar's drop? And what could they do?

The U.S. government hasn't many options if it wanted to arrest the decline. It could use stronger rhetoric to talk up the dollar. It could, in coordination with other countries troubled by the dollar decline, buy dollars in foreign-exchange markets. Or the Fed could raise interest rates, since money flows to countries with higher rates.

Neither the Bush administration nor the Fed has shown any inclination toward any of those, preferring instead to let market forces operate. In testimony before Congress last week, Mr. Bernanke said he remains "optimistic" that current U.S. economic conditions "will lead to a sound dollar in the medium term."

http://www.moneyweb.co.za/mw/view/mw/en/page94?oid=170153&sn=Detail
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print more money for the conquest of the wolrd empire

Cutten · Nov 15, 2007

I don't think this administration really believes in currency intervention. If the US was going to try to prop up the dollar, it would have been the perfect time to do so in the last couple of weeks when sentiment was very strongly bearish, yet they have done nothing. So I really don't think they plan to.

As a dollar long I would of course be delighted if they intervened, but I think it's maybe a 5-10% chance only.

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Why current administration doesn't intervene US$ decline?

alientrader

Cutten