I've never been altogether clear on when and why the right takes the value of the U.S. dollar seriously. For almost the entirety of the Bush/Cheney era, the dollar saw a precipitous decline in value, but this was of no real interest to conservatives. The issue was deemed irrelevant.
After the dollar spiked in 2009 at the height of the global crisis, its value again dropped, but this time, many conservatives responded with horror, apparently motivated by a desire to blame President Obama for ... well, I'm not really sure.
But now the dollar's value is increasing once more. The Wall Street Journal reported yesterday that the "Almighty Dollar Is Back," a reversal "driven by the relative health of the U.S. economy that has strengthened the greenback's role at the center of the global financial system."
Neil Irwin takes stock of why the dollar "is actually on a bit of a tear."
[T]he tendency to view the value of the dollar as a referendum on how Ben Bernanke and Jack Lew are doing their jobs on any given day misses a lot. If the economic outlook improves, whether because of policies enacted in Washington, or because of the natural resilience of the U.S. corporate sector, or because somebody finds a Saudi-sized heretofore unknown oil reserve in the middle of Kansas, the dollar will rise. A key part of the reason that the dollar would rise on that improved outlook would be that investors expect the Fed to raise interest rates more and sooner than they would otherwise. But this is a case where the Fed is the cart, and the economy is the horse.
What has happened in the last few months is essentially a more modest version of exactly that.
I've long believed much of the discussion on monetary policy is based on misleading adjectives, so it's worth emphasizing that a "weak" dollar is not always bad news, and a "strong" dollar is not always good news. In monetary policy, these words' everyday meaning doesn't apply.
That said, given the latest news, we do know one thing for sure: everything Paul Ryan was saying about monetary policy two years ago was backwards.
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Translation: It doesn't matter how much we borrow because we're never going to pay any of it back.
we will pay it all back with worthless fiat currency. and will remain indebted for doing so. money printing is the biggest con game on the planet.
Government is not a business, and you really need a new catch phrase if you'd like to be taken seriously here. Give it some thought. I'm sure you can come up with something clever.
Until then, SSDD. Over and over and over...
Just out of curiosity, I'd love to see this site's database statistics on "No Value" and "Inflamatory" records. While I don't expect to be surprised, there would be some entertainment value in seeing it nonetheless.
I could care less if we pay it back. The primary holders of our debt are the rich. The rich became the primary holders of our debt after Reagan gave them a 50% tax cut. I say if they want their money back, then we should go back to 91% top marginal income taxes. Until then, the wealthy can go pound sand as far as I'm concerned.
So Alva, you're good with being a deadbeat?
Are you good with the personae you've created here?
Because not for nothing, but I'd hate to be in your shoes when someone comes calling for all that bad karma. Yikes!
It will be paid but with cheapened dollars. Of course, to pay it requires the higher taxes that you oppose as we spend about 22% of GDP but only collect (tax receipts) about 17% which is down from the historic norm of 20%. But, now that you (we) have consumed the benefits (all that government has bought over the recent decades be it wars or food stamps) you and the Tparty don't want to pay for what you have already gotten.
Spend and don't tax looks a lot shabbier than tax and spend.
Alva,
As it was pointed out at this site a couple of days ago, 19% of the national debt is owed Social Security. So if you really don't care if we pay it back, then I guess the Social Security Administration (which tend to benefit the lower and middle class a lot, lot more than the rich) can also "pound sand".
The obvious overwelming majority view here is basically that the debt does not matter at all - regardless of the amount. Usually most people here are very pragmatic and sensible, but when it comes to the nation's fiscal status and policies, it is all just "on paper", will not affect us now or in the future and/or will somehow be OK once we turn some proverbial corner. AND most response to statements like this will be pointing out how we got here (Bush). That is fine, but does not change the amount of deficits or debt in the here and now, but it seems to be the only real response.
Mr. Dubois, even with cheapened dollars, the debt hasn't been paid down since 1957. We will be unable to afford the interest, long before paying anyone back.
the strong dollar policy is the effort by the wallstreet banksters to get other countries to trade other dollars for u.s. dollars so that american corps can get oil priced in terms of dollars (and paid the same) and so that wallstreeters can then get labor in those other countries ever cheaper.
this position is being challenged by russia and china. also the swiss and now germany and venezuela are subordinating the dollar for gold by buying gold to protect their own currency from dollar trading manipulators.
whoever said the u.s. is not involved in currency manipulation is telling the truth because the u.s. is no longer involved in currency manipulation after achieving the goal of currency manipulation - that goal being the reserve currency.
the net of the entire game is VALUATION FRAUD. and it is a lot worse than you might imagine.
Whoa!!!
Valuation Fraud.
I have been wondering about this for the last few months and thinking about hiding the tin foil, since I was obviously going off the deep end, but now another fellow loonie?
I'm not sure that it's a plot so much as the result of loopy conservative economics tied to plain old greed but the results are potentially disastrous for us all.
the GS mining bank will print money to buy up all mines then bid up the price of their digs then print more to loan to you so that you can afford their new high prices then find a way to pay them back - effectively voluntarily handing your life's work over to them. of course this deprives your children of any inheritance but the wallstreet thievers will loan them their lives for a short while until they find a way to expire them for being too expensive.
this is what happens when one lets capitalism rule one's life. hopefully people will put a muzzle on capitalism and back into the cage where it belongs.
meanwhile, your foil will increase in value and the "going paranoid" repubes will be making you offers.
This worries me: a strong dollar in addition to the sequester are both headwinds on the recovery. Can't Jack Lew come out and say something about how the U.S. government's not really that keen on the whole "sound dollar" thing? Crud.
The Randistas remember that one of FDR's first acts as President was to demonetize gold within the US. (Nixon finally closed the Gold window for a free floatimg Dollar). They still want to turn back the clock, to limit the Federal Goverment's Monetary and Fiscal policies. Secondly, Wall St banks need instability to create trades; if the dollar dosen't move, they lose comissions
The dollar is strong because our economy is strong.
Our economy is a jacked over mess and potentially getting worse.
This "economic invincibility" thing is a complacency we can't afford.
A dollar is stil worth less than a euro, if I can remember...
The dollar is strong because it is in demand. Let's see, qe1, qe2, qe3. Wonder Who is doing the buying...
And yet, I have a brother-in-law who's convinced our economy is tanking. He's stocked up on guns and gold, and his blood pressure spikes whenever he mentions the President.
We don't allow the children near him. True story.
Sound like anyone you know?
A weakened dollar helps US exports, especially of coal, grains, and agricultural products but makes BMWs a tad more expensive. All major players are competitively weakening their currencies which is largely why gold is so high.
As for the credit of the US government, it is often said, that among the dirty shirts, US debt is the least dirty and thereby most attractive. This combined with Fed support, has kept US 10 year debt at around 2% (a negligible cost for borrowing).
Most of the hand wringing over deficits and debt is just misplaced. But theological orthodoxy requires all to be in favor of a strong dollar because it sounds good.
You are correct. But the benefit of a strong dollar makes travel and shopping in Europe cheap. When I went there in 1999 the dollar was trading at the same level it is today which is .77 euro. I went back in 2008 after Bush's mad spending spree and the dollar to euro was $1.35 to 1. Everything was very expensive there. I should go back now with the current exchange rates because I can buy a lot of brand name Italian clothes very cheap.
Absolutely. A weakened dollar did do some good for exports, since American products became cheaper to make and purchase for foreigners, but traveling to foreign locations became more and more complicated. And when you know that the most important tourist destination for Americans is the UK (I am counting out "Spring Break" heavens, like Mexico) , where the currency actually APPRECIATED in recent years, it makes traveling basically out of reach for many. As for US Debt, the 10 year Bond may only be at 2%, a low level, but Germany's 10 year Bund is at en even LOWER rate, around 1,80%, exclusively thanks to its position as the most attractive country within Europe (maybe unproductive and lazy, but their propensity to save means that buying their debt becomes less of a risk, with a collateral to use if problems arise. See Belgium or Austria for probing examples).
So the best way to pay off 19% of the national debt is to steal social security and medicare. Oh and give you a voucher! They have stolen corporate retirements and retirement funds already! Compromise: Steal from the poor and give to the rich!
The value of a Euro is more than$1.00US simply because the euro was set as an index value of Common Market currencies, and it's initial value was set higher.