Greenspan vs. Geithner is Death Match "Weak Dollar" Debate

weak dollarIn this corner we have, Alan Greenspan, ex-Fed chairman and marital playmate of NBC political correspondent, Andrea Mitchell. In that corner, Tim Geithner, current Treasury Secretary and erstwhile employer of illegal aliens. The issue is whether or not the administration is intentionally driving down the US dollar’s value in a wrong-headed attempt to help the economy.

Greenspan’s opinion came in a Financial Times op-ed piece which said, in part, the following: “The suppression of the renmimbi (Chinese yuan) and the recent weakening of the dollar are, of necessity, producing firming exchange rates in the rest of the world to, as they see it, the rest of the world’s competitive disadvantage.”

Feathers ruffled, Geithner took to CNBC – which begs the question how did anyone else on the planet actually find out about this – to respond in a sharply worded sentence: “We will never seek to weaken out currency as a tool to gain competitive advantage or to grow the economy.” Which means that is exactly what the administration is doing. If there’s one way to interpret the veracity of a politician’s words, it’s to assume the opposite.

But why would mean Mr. Greenspan say such terrible things about Mr. Obama and his cronies? Is it simply because the US dollar has lost 12% of its value against the euro and 18% against the yen since June? Maybe. It could also be that we are simply the owners of a crap poor currency and no tweaking is necessary to send it sailing down into the abyss.

American leaders and economists have long believed that the Chinese government is deliberately keeping the yuan low so as to prop up their own competitive advantage. In other news, the world is round and fire is hot. Of course they’re keeping the yuan low! Why on earth wouldn’t they? To help the poor, downtrodden American worker? Get real. But if it is true that the weakening dollar is the result of a preconceived plan on the part of Geithner and Obama, this group is even dumber than we thought, and that’s saying a lot. Are these jokers willing to risk permanent long-term damage to our national currency playing inflationary chicken with the communists?

Why should we think they wouldn’t?

The American Monetary Association Team

American Monetary Association

Flickr / AZRainman

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