Wednesday, March 19, 2008

Are they having a laugh?

by Capt. Fogg

I had to turn off the tube last Sunday when Secretary Paulson, with a look on his face like a dog that needs to be taken outside now, told us that the government has a strong dollar policy and would stick by its belief in the need for a strong dollar. Having just put down Michio Kaku's book on parallel universes, I had to look out the window to reassure myself that there weren't two suns in the sky. So when I made a Monday morning call to the land of cuckoo clocks and cheese to discuss the strengthening Yen, I asked whether the administration's support of the dollar was widely accepted there. He laughed. Swiss bankers don't often do that.

I have no idea whether he had read Daniel Gross' March 15th article in Slate which gives us
"The very mention of the strong-dollar policy now elicits raucous bouts of knee-slapping in even the most sober Swiss banks. (How do you say schadenfreude in German?)
I'm not sure it's Schadenfreude, ( and that's how you say it in German) but the man did laugh.

Despite the cocky assurances of Blognosticators who have mastered the language of Economics sufficiently well as to sound just as confusing as the pros, the working economists I know all seem to be laughing, if not at our pain, at the swaggering superiority we are still trying to maintain in the face of the Dollar's decline and the faltering ability of American companies to compete in the world market.

Gross tells us that after Bush's pleading with the producers for lower oil prices to help us through the recession that he refuses to call a recession
"OPEC President Chakib Khelil responded acidly that crude's remarkable run had nothing to do with the reluctance of Persian Gulf nations to pump oil, and everything to do with the 'mismanagement of the U.S. economy.' (How do you say schadenfreude in Arabic?)"
Who knows, but we're not going to hear them say "I feel your pain" are we?

"The dollar's weakness reflects the world's collective, two-thumbs-down verdict about the ability of the United States—businesses, individuals, the government, the Federal Reserve—to manage the global financial system and the world's largest economy."
says the article and I have to agree. International financiers, laughing or not, are concerned with
"misplaced assumptions about housing, a lack of necessary regulation and irresponsible use of debt with sophisticated financial instruments,"
as Ashraf Laidi, currency strategist at CMC Markets says, according to Gross. The self-righteous bumbling and fumbling and strutting of the current administration has rubbed off on all of us from its inception and we may be able to continue insisting that we don't care what the world thinks, that we know better, that no lesson can be learned from the successes of others, but if pride cometh before the fall, prideful stupidity at this level must presage something really, really funny.

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5 Comments:

OpenID expatbrian said...

Of course I'm sure that 95% of the population does not read the financial news, nor do they have a clue about the strength or weakness of currency or the impact of the dollars worth on international economies or their own. What they do know is that last night, on the news, after eatin' dinner and feedin' the dog, they saw Bush say "the economy is sound". So naturally with a big WHEW they believe everything is AOK. And we're gettin' real close to a victory in Iraq too, y'all.

Fuckin' idiots. They deserve him.

5:55:00 PM  
Blogger Capt. Fogg said...

"Fuckin' idiots. They deserve him."

I'd like to think there's a special place in hell (a small town in Arkansas) for those who not only believe, but who have made such efforts to denounce those who don't believe as traitors and "Liberals."

9:29:00 AM  
Blogger lester said...

I've been looking at something called the Merk hard currency fund. It's sort of what putting your money in the bank used to be before Greenspan figured out how to inflate the money to himself and his fellow elites. it gets a modest interst every year and is based on currencies from countries that have sensible monetary policies.

9:58:00 AM  
Blogger Capt. Fogg said...

If the very rich are very different, one of the ways is that they can make an awful lot of money on the disparities in international interest rates and currency fluctuations in ways that aren't available to ordinary mortals.

Japan's long term reliance on low interest rates to prop up their economy has enable people to borrow large sums at 0.5% and invest it in money markets in other currencies earning 15% It's called the carry trade and it hasn't helped Japan at all. What will ever lower rates do in the US?

10:46:00 AM  
Blogger lester said...

the federal reserve is killing america

10:02:00 AM  

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