The US Dollar Currency Index Low Was 71.58, Reached In April 2008

71.58 on the US Dollar Currency Index in April 2008 represented a decline of the dollar in excess of 40% from the 120 level which prevailed before the closing of the gold window in 1971.

The Bernank Bombs The Buck

US Dollar Currency Index watchers have been reaching for the gin in recent weeks:

This was supposed to be a summer when the U.S. dollar would stand tall, pumped up by higher interest rates and the prospect of an improving economy.

But instead it's been sagging, with the dollar index losing 3.6 percent to 81.02 since July 10. On that day, Fed Chairman Ben Bernanke clarified the Fed's intentions about what it means to 'taper' its $85 billion a month in bond purchases. He emphasized that even with paring back of bond buying, the Fed would take its time pulling back from easing, and it has no plans to raise short term rates any time soon.

Read the rest from Patti Domm at CNBC here.

How A Good Central Banker Is Supposed To Behave

not like this under Greenspan and Bernanke

David Merkel, here:

A good central bank fights the politics of the nation of which it is a part and tries to preserve purchasing power, ignoring labor unemployment. It tries to be a paper "gold standard." That has not been the Fed for 25+ years.

Bernanke Reverses Himself With More "Accommodation", Tanks Dollar Over 2%

Someone must have found out something about The Bernank. Was it with the help of the NSA? In May bald Ben broached the topic of tapering just two days after Obama effectively fired him by saying Ben had been at the Fed too long just like Mueller has been too long at the FBI (a total slap in the face to Ben), and when Ben doubled down on the tapering again in June to show that he was really serious opinion broadly ridiculed him. Bonds took it in the shorts, and savers lost a lot of money. Now he's completely reversed himself all of a sudden, stocks are flying to new heights and the dollar erases its gains. He's either a manic depressive, or Obama's got something on the guy.

The US Dollar Has Tanked Since Bernanke Spoke Before Congress On May 22nd

THE US DOLLAR BREAKOUT ABOVE 84 HAS FAILED FOR NOW.

The dollar has fallen 3.15% since May 22nd when Bernanke opened his big yap and went off-script in front of Congress, hinting at a tapering off of QE in the near future.

The dollar closed at 84.35 on May 22nd and closed yesterday at 81.69.

When just words can tank fiat bonds and fiat dollars, isn't it time to pay our respects once again to Article 1, Section 10?

"No state shall . . . make anything but gold and silver coin a tender in payment of debts;"

Three Dubious Firsts For Obama In Quick Succession In 2011

The dollar hit its all time low under Obama, on 5/2/11 at 67.97, but this has not been much discussed even though it is surely related to the following other firsts.

On 8/5/11 Standard and Poor's downgraded the US for the first time ever, from AAA to AA+, primarily because it was looking for $4 trillion in spending cuts over ten years and only got $1 trillion in the sequestration deal.

And then on 9/2/11 it was reported that for the month of August 2011 net zero jobs had been created, the first time since World War II that a month went by without job creation.

These are remarkable and dubious firsts, three of them in a row in the span of four months.

It is clear how much two of these still rankle Obama, who views them in purely political terms instead of as injuries to all of us. In a press conference on the debt ceiling almost a year and a half later, held this last Monday, Obama brought up both the AAA rating loss and the net zero jobs milestone, seeking to blame them both on Republicans:


"And they'd better choose quickly because time is running short. The last time Republicans in Congress even flirted with this idea [of not raising the debt ceiling], our triple-A credit rating was downgraded for the first time in our history, our businesses created the fewest jobs of any month in nearly the past three years, and ironically, the whole fiasco actually added to the deficit."

The revisionist history on the jobs number is noteworthy. Who would even remember the fact now unless he brought it up?

The fact of the matter is, however, that the weak dollar, which is not even on Obama's radar screen, is the root of the problem for both our out of control debt and deficits and the dearth of jobs.

And Jeffrey Snider, coincidentally, says just as much today, here, concluding this way:


"The politics of the debt ceiling really should be concerned with monetarism rather than focused solely on spending or deficits. But that is a hard position for either party to take. Democrats won't because their interests are aligned with monetarism, while Republicans have at many times embraced monetarism with equal passion. Neither seems to want to move outside conventional economics that salutes as policy success a 64% increase in total debt without any perturbation in interest costs.


"We have not just a fiscal problem, but a persistent and massive monetary imbalance through dollar debasement that is directly related to both the debt disaster and the weak economy. Without directly facing it and working toward currency stability, we will be stuck with both the continued debt trajectory and no real growth. Neither can be adequately solved without first solving the dollar by ending capital repression."

Harold Meyerson Thinks The Rich Got One Sweet Deal From The Democrats

Because the capital gains tax rate was raised only 33% from 15% to 20% instead of rising 164% to equalize it with the fiscal cliff deal's highest ordinary income tax rate of 39.6% on the richest Americans. Yikes! Can you imagine?

For The Washington Post, here:

"The tax deal Congress passed last week raised the top rate on wages and salaries from 35 percent to 39.6 percent. The rate on income from capital gains and dividends, however, was raised to only 20 percent from 15 percent. There has been no rending of garments nor gnashing of teeth from our super-rich compatriots; they got one sweet deal."

But it's a point conservatives should ponder more because Meyerson writes of common ground we share.

For one thing, there is love of country in Meyerson's article, a desire to see Americans benefit from investment domestically where it throws off all sorts of additional beneficial economic effects, instead of seeing those accrue to communities in foreign lands. American business long ago became unpatriotic in service to the almighty bottom line, which is why your job went to Mexico and then to China. This ushered in a process which has made the American worker more equal to the poverty of the foreign worker, instead of the other way around. But higher taxes on investment capital aren't going to reverse that. Only disincentivizing foreign investment and rewarding domestic investment will, which is a point which illuminates a conservative principle.

When it comes to economic inequality, conservatives should consider Meyerson's observation that the biggest gains overall in recent decades have come in investment income to wealthy investors, not in ordinary income to the rest of us. He doesn't say so, but it illustrates a conservative principle: When you want less of something, tax it. That is precisely what has produced the situation he decries. We have taxed ordinary income exorbitantly compared to investment income and consequently we have less of the ordinary income variety and more of the investment income variety. And we also actually reward foreign investment in the tax code, allowing unpatriated profits to escape taxation. To get more gains in ordinary income, we should equalize tax rates between ordinary and investment income . . . just not at progressive income tax rates. Conservatives should press for a world in which all money is treated the same in the tax code by taxing income of all kinds at one low uniform rate. Income inequality has to begin somewhere, and it begins in the tax code, not in the profits of Warren Buffett.

Similarly with supporting an aging population, it would be nice if there were a little liberal outrage, and a little conservative outrage for that matter, for the way the federal government conspires to suppress interest rates with a weak dollar policy. This punishes savers, but especially the old who expected and need return on capital to take care of themselves instead of depending on government. A strong stable dollar which has the same value when you are 80 as it had when you were 8 is what we need, but sadly our entire class of elites is committed to monetarism, which at its root means the dollar of 2013 could hardly be less equal to the dollar of 1913 than it is.

There is a theme here involving inequality, expressed in lower-wage foreign workers, ordinary income punished with higher relative taxes, and devalued savers' dollars, which could unite liberals and conservatives, and also the country, if only it had an effective advocate in a statesman who had the audacity to point out that big business and big government seem to be joined in common cause against the best interests of the American people. None dare call it fascism.