Greenbacks gone wild

"I put the U.S. economy up against any in the world in terms of competitiveness," says Henry Paulson. But this is the same man who said the United States was "strongly committed to a strong dollar." If the U.S. is strongly committed to a strong dollar, there is no evidence of it that we can see. A strong dollar would require a strong man at the Fed to raise rates. We don't think there is anyone that strong ready to take the job. Instead, U.S. financial policy has been in weak hands for many, many years. Deficits have been tolerated…excused…and then accepted. Now, "deficits don't matter," says Dick Cheney. The dollar has been allowed to float…free from any connection to the real world of real things. The world has been saturated in them…drenched in them…up to its neck in them. That is why the value of the dollar goes down; we see no one strong enough to reverse the policy.

Instead, government spending is out of control. The dollar is out of control. Debt is out of control. The trade balance is out of control. The Government Accounting Office says the IRS is out of control, too. [...] "I put the U.S. economy up against any in the world in terms of competitiveness," says Henry Paulson. But this is the same man who said the United States was "strongly committed to a strong dollar." If the U.S. is strongly committed to a strong dollar, there is no evidence of it that we can see. A strong dollar would require a strong man at the Fed to raise rates. We don't think there is anyone that strong ready to take the job. Instead, U.S. financial policy has been in weak hands for many, many years. Deficits have been tolerated…excused…and then accepted. Now, "deficits don't matter," says Dick Cheney. The dollar has been allowed to float…free from any connection to the real world of real things. The world has been saturated in them…drenched in them…up to its neck in them. That is why the value of the dollar goes down; we see no one strong enough to reverse the policy.

Instead, government spending is out of control. The dollar is out of control. Debt is out of control. The trade balance is out of control. The Government Accounting Office says the IRS is out of control, too.

~Bill Bonner, 13 Nov 2007