Strong Dollar Policy???

Treasury Secretary Geither said:"I believe deeply that it's very important for the U.S. and the economic health of the U.S. that we maintain a strong dollar," he said at a roundtable discussion with Japanese reporters. We bear special responsibility for trying to make sure that we are implementing a policy in the U.S. that will sustain confidence not just among American investors but investors around the world."

I would consider that statement to be a bold face "LIE." Geithner and Bernanke have created policies that have destroyed the value of the dollar, driving it lower since March 2009 from 89.6 to 74.8, a decline of almost 16.5%, which on an annualized basis is approximately 25%. Those are the facts!

The collapsing dollar is a policy, inspite of what Geithner has said about wanting a strong dollar. What is a weak dollar policy? Keeping the fed funds rate at “Zero.” And as long as this policy continues, the dollar will only get weaker and weaker. It is the means by which the stock market has been propped up by an attempt to "instill confidence" in the American people. The economy is clearly not in a recovery mode. Unless, you consider the “cash for clunkers, which added 1.5% to GDP and the $8,000 first time home owner tax credit, which added approximately 1% “ to the GDP numbers for the third quarter. These two boondoggles have simply brought demand forward from 2010. As a consumption-based economy (70% of GDP is derived from consumption), we cannot recover until we create jobs!

Instead our politicians are engaged in a confidence game, trying to convince Americans that "things are getting better,” because their 401K’s have recovered from their devastating losses of 2008, which must mean the economy is improving. The rally in the stock market has nothing to do with the economy and the outlook for it. It is tied to one and only one thing, a declining dollar.

But the market rising on the back of skyrocketing energy prices (oil has doubled since March and gasoline is now back to $3 or higher in many parts of the country) doesn't create a single job. In fact, rising energy prices destroy consumer purchasing power through reducing one’s disposable income