< HOME  Friday, April 28, 2006

Bernanke Signals Dollar's Free Fall

Last week the IMF called for its demise. This week, Bernanke dutifully obliges. On his cue, the dollar begins its free fall . . .
The U.S. currency fell broadly on Thursday after Fed Chairman Ben Bernanke said in congressional testimony that "at some point in the future" a pause in rate increases may happen.

He also dealt another blow to the dollar by saying that global imbalances, a term often used to refer to the gaping U.S. trade deficit and surpluses in Asian countries such as China, may affect the currency.

The dollar has remained under pressure since last weekend when finance ministers of the Group of Seven major powers urged China and other Asian countries to let their currencies rise to help mend such imbalances.

"Since the G7 meeting, the market's focus has shifted to global imbalances from interest rate gaps," said Yoshinori Natori, currency trader at Shinkin Central Bank.

An end to the Fed's current cycle of hiking rates would remove a pillar of support for the dollar that had helped it rally in 2005, especially with both the euro zone and Japan expected to tighten policy this year.

* * *

Traders said that bids from Japanese investors blocked the dollar's fall, with some of them buying U.S. Treasuries in the wake of Bernanke's comments.

In other words, we ain't seen nothing yet! The dollar's about to take a nose dive.
The Fed's Bernanke denied that the G7's statement was meant as a call for a weaker dollar. [Yeah, right!] Hiroshi Watanabe, Japan's vice finance minister for international affairs, also said earlier on Thursday that markets had misinterpreted the G7 communique.

But many market players and analysts were not convinced.

"It simply doesn't make sense to have the dollar rising if you want to mend global imbalances," said Seiya Nakajima, chief economist at Itochu Corp.

"G7 nations seem to be accepting a gradual fall in the dollar. But at the same time they want to keep its fall under control so as not to disrupt the global economy and markets."

And they have the nerve to call it a 'free' market. I'll leave the assorted expletives to your imagination.


At Friday, April 28, 2006, Blogger borkafatty said...

free fall ya right to a $3.00 loaf of bread...we are truly in for a major wake up call. I hope all americans, even the ones with the blinders on are paying close attention.

Funny thing last night I had to go to my local Home Depot IE:(the hundred dollar store) I was not consuming my brother in law was anyway, there was a guy in fornt of us at the check out line.

He had a brand new Weber gas grill $549

and a $799 Patio set

I said to my brother in law watch this, he sadi what, I said $10 this guy whips out the credit card, he says ok.

Sure enough AMERICAN EXPRESS bingo $1,400 and change plus the ususal interest, I figure he will be paying on that for at least 2 years @ 13% +- .

Moral of the story america is still fast asleep.

And yes I have bought mine CASH or dont buy it at all..

peace out

At Friday, April 28, 2006, Blogger borkafatty said...

Then again after reading these cooked numbers we all must be living in the wrong country. Acording to this article americans are living the vast high life...could umm someone show me where the S.S.HIGHLIFE IS DOCKING I NEED A VACATION ALSO..


At Tuesday, May 10, 2011, Anonymous Anonymous said...

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