Have Fed and Treasury actions helped or hurt the economy and health of the dollar?
*Bloomberg, by Rebecca Christie & Peter Cook, July 16, 2009:
“Treasury Secretary Timothy Geithner said there are ‘durable’ signs
that financial markets are on the mend, while repeating that the U.S.
must not withdraw its stimulus measures before an economic recovery is
entrenched.
‘We’re seeing durable signs of greater confidence’ in markets, Geithner
said in an interview with Bloomberg Television during a visit to Paris
today. At the same time, he warned that withdrawing stimulus too soon
would ‘weaken the basic fabric of the economy,’ and ‘that’s not
something we can afford to do.’
Geithner’s remarks reflect an economy that’s showing signs of pulling
out of its deepest recession in half a century, with at the same time
little momentum for a recovery. The Treasury chief stressed today that
the Obama administration’s efforts are focused on restoring the U.S. to
a path of growth, then reining in budget deficits later to buttress the
value of the dollar.
In a later Internet chat with Les Echos newspaper today, the Treasury
chief said “the dollar’s role in the international financial system
places special responsibilities on the United States -- to sustain
confidence in our financial system, to bring our fiscal deficits down
when recovery is in place, and to preserve the Fed’s strong record of
price stability.”
A Treasury report today showed foreign investors sold a net $22.6
billion of Treasuries in May, the most since November. Japan and Russia
cut their holdings of U.S. debt even as China -- whose foreign-exchange
reserves have now surpassed a record $2 trillion -- enlarged its
portfolio.”
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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