Bush Bid to Weaken Currency Could Backfire, Some Say

[cthrumatrix]

Gambling With the Dollar?
Bush Bid to Weaken Currency Could Backfire, Some Say
By Jonathan Weisman
Washington Post Staff Writer
Wednesday, September 24, 2003; Page E01


The Bush administration has embarked on a high-stakes effort to reduce the value of the dollar in Asia, hoping to stimulate exports and jump-start the U.S. job market but risking a sudden spike in interest rates and an eventual slide on the stock market.



For weeks, top administration officials have publicly pushed China and Japan to allow their currencies to strengthen against the dollar. Its campaign culminated over the weekend when the United States persuaded finance ministers of the seven major industrial countries to issue a communique calling for more flexible exchange-rate policies, effectively pressuring China and Japan to stop practices that depress the value of their currencies.

more

"It's domestic politics -- that's the long and short of it," said Daniel K. Tarullo, a Georgetown University law professor who was President Bill Clinton's senior international economic adviser. "This is the administration's effort to deflect attention from the hemorrhaging of manufacturing jobs from the United States by trying to place all the blame on other countries."

snip

http://www.washingtonpost.com/wp-dyn/articles/A54874-2003Sep23.html

[Mari333]

1. someone please tell the * administration

To stop f*cking around with the economy....when one thinks it cannot GET any worse from these morons, it does....

[ClintonTyree]

2. What else could we expect.................

from the thief in chief. He's never taken responsibility for anything in his miserable life. Of course it's their fault, he can do no wrong.

[unblock]

3. i see stagflation in our future ...

unless the USD devaluation is controlled VERY carefully, we will see inflation due to price hikes on imports. profits will be squeezed while workers demand more salary to handle the price hikes. so employers will raise domestic prices AND lay off people.

shrub is the worst of both nixon and carter combined.

[teryang]

4. I agree

This is a very likely development. As the defense dept./security budget and deficit gets ever larger (larger than at the height of the Vietman war), and dollars hemorrhage overseas stagflation will occur.

[papau]

9. Carter fought inflation/interest rates AND achieved 3.25% /yr GNP growth

The same as Reagan - about the same - since Reagan's 8 year economic wonder - purchased with 1.7 trillion of new debt added to the prior 1 trillion - was only 3.33% /yr average compound growth for GNP.

Indeed Reagan's tax cut lead to a recession - just like Bush's tax cut - and the media pretends that both economic downturns were not caused by long term interest rates reacting to the projected "forever government deficit" - because the GOP tells them deficits do not matter - and the media can not think for itself! - or really is controlled by the GOP right wing.

[Democat]

5. Another four years of Bush and the world will be outsourcing to America

And we'll all be working for $0.10 an hour, if we're lucky.

Remember, his forest policy was to cut down the trees to protect them.

[Gman]

6. It's almost like they say...

"Ok, what can we fuck with next?"

[calimary]

7. TRULY!

[The Magistrate]

8. One More Old Quack Nostrum

The tremendous debt imposed upon our people by the looting of the public treasury conducted by the criminals of the '00 Coup can be most easily settled, they think, by their natural inclination to fraud; i.e., by cheapening the currency so that a dollar repaid is worth less than the dollar borrowed. In a word, inflation. Those who depend on wage and other periodic incomes will be greatly harmed; those who possess tangible goods and real properties will be greatly benefited.

The difficulty is this: once begun, these things cascade quickly beyond control. The United States depends on foreign purchasers of its Treasury debt to maintain it operations. If the value of these dollar instruments begins to decline relative to other solid currencies, such as the Euro, fewer will invest in them; even U.S. capitalists will find other means to invest their capital. this will force an increase of interest rates to attract capital to Treasury bonds, which will increase the debt that needs to be serviced, which will require an even greater cheapening of the currency to enable the debt to be "paid off" with enough cheaper dollars.

Sooner or later, you take your money to the store in a shopping bag, and return with your purchases in a purse.

[rucky]

11. Can I get my paycheck in Euros or Yuans?

I'll bring it up at the next union meeting.

[Zero Gravitas]

10. Everything else Bush* has done has backfired

so why would this be any different?