Wednesday, November 29, 2006
Chronicle of a death Foretold: Dollar woes
"I didn't warn him because I thought it was drunkards' talk,"
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Hank Paulson must be wetting himself laughing. First he gets to defer the tax on all his shareholding in Goldman, now the dollar is finally on the road to collapse which should , if it falls long enough and far enough, give the US economy a helping hand. Finally he has intimated that Sarbanes-Oxley in its current guise is not a great way to do business, so he'll just copy the UK regulator. Good work, why not model yourself on the FSA, they 're pretty effective. I think this is called adopting best practice or plagiarism or stupidity.
I have discussed the inevitable dollar decline last year in a previous blog, rather than repeat myself and bore everyone - go and look at the piece called Currency Movements Dollar/Sterling:No way but down in the November 2005 archives. Nothing has changed, except the people in charge of the US economy are more inexperienced and incompetent than the lot before.
Anyway Hank and Ben are off to China soon to persuade the Chinese that the renmimbi needs to appreciate- all this while China is slowing trying to diversify out of dollar reserves. All very fishy.Why is Ben Bernanke going with Hank anyway? What does he have to add?Financial Markets are notoriously irrational.They react very negatively to bearded people. See if you can think of any serious banker in the world with a beard ( except Joseph Perella). Unlikely. Maybe it's somekind of comedy double act, maybe they're making a film in the Ealing tradition.Carry on Central Banking.
Practical Implications of dollar depreciation
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Hank Paulson must be wetting himself laughing. First he gets to defer the tax on all his shareholding in Goldman, now the dollar is finally on the road to collapse which should , if it falls long enough and far enough, give the US economy a helping hand. Finally he has intimated that Sarbanes-Oxley in its current guise is not a great way to do business, so he'll just copy the UK regulator. Good work, why not model yourself on the FSA, they 're pretty effective. I think this is called adopting best practice or plagiarism or stupidity.
I have discussed the inevitable dollar decline last year in a previous blog, rather than repeat myself and bore everyone - go and look at the piece called Currency Movements Dollar/Sterling:No way but down in the November 2005 archives. Nothing has changed, except the people in charge of the US economy are more inexperienced and incompetent than the lot before.
Anyway Hank and Ben are off to China soon to persuade the Chinese that the renmimbi needs to appreciate- all this while China is slowing trying to diversify out of dollar reserves. All very fishy.Why is Ben Bernanke going with Hank anyway? What does he have to add?Financial Markets are notoriously irrational.They react very negatively to bearded people. See if you can think of any serious banker in the world with a beard ( except Joseph Perella). Unlikely. Maybe it's somekind of comedy double act, maybe they're making a film in the Ealing tradition.Carry on Central Banking.
Practical Implications of dollar depreciation
- Cheaper holidays in US denominated regions. These places are now verging on the reasonable value. http://www.jumbybayresort.com. www.sandylane.com
- Lower bonuses when converted to sterling, unless you've already elected a rate for conversion
RB
