Mr. Geithner’s “Deeply” Held Belief

Mr Geithner, speaking to reporters in Japan yesterday made several statements in which he espoused his belief in a strong dollar policy.
"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" Mr Geithner said "We bear special responsibility for trying to make sure that we are implementing policy in the U.S. that will sustain confidence not just among American investors and .. savers but investors around the world"

However at the G-20 Meeting of Finance Ministers and Central Bank Governors on November 7, just 4 days ago he said the following:
"This is why the recovery programs put in place in the United States and around the world were designed to provide support for growth over a two year period, and this is why governments around the world are committed to continue to reinforce the recovery now underway, before we shift to restraint."

The policies engaged in by the Department of the Treasury under Mr. Geithner have been decidedly negative for the dollar which is near 18 month lows, and has come under fire by countries all over the world. Support for removing the dollar as the worlds reserve currency is on the rise with many sovereigns openly stating this position. Continuing the policies in place may or may not contribute to a long term world wide recovery but it is certain that continuing the policies that have forced the dollar down to these levels will not cause it to strengthen.

I am concerned that Mr. Geithner says one thing while doing another. His lack of taking any responsibility for the crisis during his spoken testimony before congress earlier this year was disconcerting. After all as president of the New York Federal Reserve he was a major player in the events that led up to it, and if he didn't contribute to the crisis by action, he then must have by his inaction. His shaky performance before congress was not that of a resolute decision maker but of a milquetoast. Now his stating a "deeply" held belief in a strong dollar policy while engaging in essentially a diametrically opposed set of actions is even more disconcerting. A pusillanimous back bench pipsqueak is questionable as the Secretary of the Treasury but an individual who's veracity is in question is intolerable in the extreme.

Mr. Geithner should immediately lay out his "strong dollar policy" or explain how the policy in effect can in any way be interpreted as such. It is my "deeply" held belief that the only way to do this would be to employ Orwellian doublespeak the likes of which we haven't seen in quite some time.

I supported Mr. Geithner's appointment at the time he was chosen. I have come to believe that that support was unwarranted and the choice erroneous. His words appear to be divergent from his actions and from history as we have come to know it. The last thing this country needs is to have the people making decisions of monumental importance be of questionable character. I hope in the upcoming days Mr. Geithner rises to the job at which he swore to do his best, and that we have not in fact seen his best because that is clearly insufficient.

Disclaimer
The Author holds short positions in US Dollar futures, and is short the Long Bond (30 yr Treasury) via Futures and long TBT

References
Geithner Affirms Strong Dollar Policy - WSJ
Statement by Secretary Geithner at the G-20 Meeting of Finance Ministers and Central Bank Governors


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