Bernanke is armed and dangerous - and he's not afraid to use it.
"Although U.S. trade deficits cannot continue to widen forever, these deficits need not engender a precipitous decline in the dollar, nor should such a decline, were it to occur [wink, wink], necessarily disrupt financial markets, production or employment," Bernanke said in a letter to Rep. Brad Sherman, a California Democrat.Notice, he makes no reference to PRICES which invariably go up when the dollar goes down.
"[T]he possibility of a future disruptive correction of the U.S. trade deficit cannot be ruled out" [he said.]That's a promise, but never fear . . .
"The best way to protect the U.S. economy from such an event is to continue policies designed to maintain the stability of the financial system [us in power] and the flexibility and resilience of the economy," he added.By 'flexibility' he means the willingness of Americans to bend over, and by 'resilience' he means over, and over, and over again.
But, can't he do something to stop it, you say?
Bernanke noted that the U.S. Treasury secretary was the chief spokesman on U.S. policy on the dollar, but said current policy was to let markets determine the dollar's value.I'm afraid that's against corporate- I mean, National policy.
"Stated U.S. policy has been generally not to intervene in currency markets except to counter disorderly market conditions," he added.