Thursday, November 11, 2010

Geithner: Bernanke is Not Debasing the Dollar

Treasury Secretary Geithner said on CNBC that the dollar’s drop in recent months is due to a reversal in safe-haven capital flows.

Investors are no longer seeking as much of a refuge in dollars, and that’s “a sign of greater confidence that although we face challenges in the U.S. and globally the risks we face are more manageable.”

This shift is “the dominant trend that we see,” he said.

Although Geithner is accurate in pointing out that some of the decline in the dollar is the result of a reversal of the flight into the dollar, he completely ignores that Bernanke's QE2 is causing international concern about the value of the dollar.

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