Paulson Says U.S. Currency is the Chosen One

U.S. Treasury Secretary Henry Paulson certainly didn't have a problem complying with the Federal Reserve commands to print money from thin air, that they stopped keeping records of. He usually speaks only when there is something to cover up, and he's been really flapping his jaws as of late. The U.S. Dollar closed at a stunning new low of 71.11 Friday amidst the speculation that the Fed will cut interests rates again, and it sank to new lows against other major currencies as well. Paulson wants the world to buy his bluff that the worldwide economy will screech to a grinding halt if something were to happen to the U.S. Dollar's reign as the world currency. That may be, but it doesn't mean it won't happen, because in a lot of ways, it's happening already. He says that America is the biggest economy in the world, but everyone knows that there is plenty of competition right now for that spot.

Reuters

Treasury Secretary Henry Paulson on Friday defended the dollar's status as the world's reserve currency, saying the U.S. economy's strength, openness and competitiveness would "shine through" the current market turmoil.

"The dollar has been the world's reserve currency since World War II and it's been that for a reason. We are the biggest economy in the world, we are as open as any economy to investment, to trade, and we've had stable economic policies ... we've had good productivity," Paulson told reporters at an impromptu news briefing on Friday.

Paulson repeated the administration's oft-stated mantra that a strong dollar is in U.S. interests and that currency values should be set in a competitive marketplace.

He acknowledged he has heard questions about the status of the dollar as the world's preferred reserve currency. While the housing downturn and credit market turbulence are likely to have an impact on the U.S. economy, there is underlying strength, he said.

"I have no doubt that looking out over any reasonable period of time, you're going to see our strong economic fundamentals in this country shine through," he said.

Fed Still Looking to Another Rate Cut After Comments from China

It is hard to really gather what is really going on in the minds of the U.S. Treasury and Federal Reserve. They keep right on printing more and more fiat money they stopped keeping records of, and the dollar is facing an all-time high sell-off, failing against about every other currency in the world. Now the chances of ANOTHER rate cut in December are said to be increasing.

China's Cheng Siwei said that their country will soon start diversifying and favoring the stronger currencies, which means, as they've openly discussed before, releasing some or a great deal of their greenback reserves amid the recent successes of Asian currencies. Henry Paulson, U.S. Treasury Security, shrugged the statement off as usual, saying that none of the Chinese officials he talks to have mentioned it. Of course not! Is that supposed to mean that it can't happen, or that there is no cause for alarm? That is absolute bologna. They want to keep bailing out the banks and big corporations, which want to screw common citizens at every turn. It is as simple as that. They clearly have no fears of causing a collapse of the dollar, and the government wants it to happen; so like they say about China's warnings, take everything with a grain of salt. Everybody wants to dump the dollar right now to not be the last one holding, but no one exactly wants the down turn that that will cause, and that is what the careless treasury and central bank are counting on.

Reuters

U.S. short-term interest rate futures rallied on Thursday, boosting the implied chances of a Federal Reserve rate cut in December as dealers dissected testimony from Fed Chairman Ben Bernanke.

Futures show as much as an 82 percent implied chance that the Fed will trim benchmark rates by another one-quarter percentage point in December, up from 70 percent late on Wednesday.

In testimony prepared for the congressional Joint Economic Committee, Bernanke said that the U.S. economy faces risks on both the growth and inflation fronts.

AFP

"This is the clarion call for all currency reserve managers around the world that the largest holder of US dollars outside the country is seriously thinking of selling them for other currencies," said Andrew Busch at BMO Capital Markets.

Busch, pointing to the tight global credit, said "the only central bank acting to soften the credit blow is the US Federal Reserve as this country remains the epicenter for the problem. Thus, the US dollar comes under pressure and subject to a potential exogenous shock ... like a shift in reserve management."

Market expectations are rising for a further rate cut when the Fed meets on December 11 because of an expected sharp economic slowdown due to a deepening housing slump and a subsequent crisis in the high-risk subprime mortgage sector.

"The market is still quite concerned about the fallout from the subprime mortgage crisis, so a lot of people are anticipating further rate cuts by the Fed," said Daniel Chan, senior investment strategist at DBS Bank.

Government Attempting to Cap the Price of Gold By Selling its Reserves

The U.S. Dollar is in grave danger. A lot of people already know that, but this is just the icing on the cake. Fort Knox houses the majority of the United States' gold reserves. The Federal Reserve and U.S. Treasury have been printing money over the past few years that we simply don't have, and of which we have absolutely no record of because the government decided to quietly stop telling the world how much 'fiat' money it prints. Huge credit goes out to the writer of the original article.

As the anti-American outrageous spending continues with this government, they are willing to pull out all stops to continue their ways, legal or not. They are now apparently, or at least ready to, selling off the many reserves of gold being held at Fort Knox in Kentucky in order to cap the price of gold in the markets, as an attempt to sell that the U.S. Dollar is still a legitimate world reserve currency. The world is not that stupid, and this article is definitely not something media wants you to know. We are on the verge of collapse, and they just want to keep spending no matter what. It is time to help elect Ron Paul, or be on the opposite end of the revolution. When will Wall Street wake the hell up like the foreigners??